The presentation discusses mainly the use of fluel taxes in Ukraine. The general legal framework and an overview of some other planned environmentally relevant taxes is also included. The presentation was delivered at the meeting on "Economic instruments for greener products in the EU's Eastern Partnership countries" (EaP GREEN).

2. Legal framework
• Tax Code of Ukraine, Environmental Tax
Section. Took effect on 1 January 2011

3. Fuel taxes
• Tax on the sale of 12 kinds of domestically
produced fuel
• On 14 kinds of fuel brought into the customs
territory of Ukraine depending on product
code

4. Fuel taxes and their
environmental differentiation
Rates of environmentally-related tax on diesel
fuel are set depending on sulphur content:
• UAH 79.9 per tonne – sulphur content above
0.2%
• UAH 35.25 per tonne – sulphur content not
more than 0.005%
• Rates for biofuel are 20% lower than those for
fuel without bioadditives

5. Who pays the fuel tax
Tax payees that:
• Sell the fuel they produce
• Bring fuel into the customs territory of
Ukraine

6. End-of-life motor vehicles
utilisation tax
• Motor Vehicles Utilisation Law of Ukraine of 4
July 2013 sets out a legal, institutional and
economic framework for recycling of motor
vehicles in Ukraine to ensure environmental
safety, protection of ambient environment
and human life and health

7. End-of-Life motor vehicles
utilisation tax
• Law of Ukraine of 4 July 2013 amended the
Tax Code of Ukraine in so far as payment of
environmentally-related tax on recycling of
end-of-life motor vehicles
• The Law took effect on 1 September 2013
• As per Article 11 of the Law of Ukraine on the
2014 State Budget of Ukraine, all the proceeds
from the recycling tax go to the state budget

8. Who pays the vehicle
utilisation tax
• Persons who import motor vehicles and/or car
bodies into the customs territory of Ukraine
• Manufacturers of motor vehicles in the
customs territory of Ukraine to be sold in the
domestic market in Ukraine
• Those who purchase motor vehicles from
persons that are not payers of the tax

9. Who does not pay the
vehicle utilisation tax
Persons who bring in motor vehicles:
• for diplomatic missions
• which are more than 30 years old
Persons who undertook an obligation to recycle
them
Persons who purchase motor vehicles with
budget funds (for persons with disabilities,
special-purpose ones)

10. Use of utilisation tax revenues
• Funds are used to recover costs on recycling of
motor vehicles collected by collection points in
the manner set by the Cabinet of Ministers of
Ukraine (UAH 960 mln = more than USD 100
mln in 2014).
• Currently, environmentally-related tax on
recycling of end-of-life motor vehicles operates
as product-related tax and as an element of
extended producer responsibility.

11. What was planned
In 2013, it was planned to introduce a tax on a broader
range of goods:
• Products in spray cans (ozone-depleting substances)
• Light bulbs
• Accumulators
• Polymeric materials
• Raw rubber, rubber, and items made of them
• Oils
• Household cleaning products
• Natural gas used to generate electric power

12. Tax rates
• It was planned to set environmentally-related tax
rates of 0.1% to 1% of value
or
• fixed rate (light bulbs – EUR 1 per piece)

13. Reasons why they have not
been Introduced
• Environmentally-related taxes on air emissions
and waste disposal have not been abolished,
which could have resulted in double taxation
of various kinds of pollution and products (e.g.
use of natural gas, disposal of some types of
waste)

14. Conclusions
• The economic instruments framework in place
in Ukraine should be reformed drastically based
on experience in the OECD and EECCA
countries
• The priority is to introduce a tax on
environmentally-harmful products and at the
same time abolish, or reduce the number of,
pollution taxes

15. Thank you