Government plans to shield Volyn and Lviv mines from tax pressure

Government draft law provides immunity for coal enterprises

The Cabinet of Ministers has proposed protecting state-owned enterprises from the forced seizure of tax debts. State-owned enterprise Volynvuhillya has been included in the list of entities to which this protection should apply. This initiative emerged against the backdrop of a recent audit that recorded serious financial violations at the enterprise.

Audit records suspicious transactions and budget losses

Previously, the Ministry of Energy itself identified extensive violations at Volynvuhillya. According to the results of the inspection conducted in June, it was established that equipment for the Buzhanska mine, the purchase of which cost the state 10.6 million hryvnia, was sold for a significantly lower price of 3.3 million hryvnia.

In addition, the audit revealed that the enterprise spent nearly 37 million hryvnia on the relocation of equipment that was not used in the production process. Another issue was the discovery of unrecorded coal in warehouses worth over 5 million hryvnia.

Debts to miners and management change

By the beginning of May, the debt for labour payments to miners exceeded 137 million hryvnia. The audit inspection also established facts of million-hryvnia payments to the management staff. Against the backdrop of these findings, the Ministry of Energy announced the change of the company's management and the intention to transfer the collected materials to law enforcement agencies.

Transfer to the State Property Fund and tax protection plan

Despite existing problems, on 3 October the government approved the transfer of State-owned enterprise Volynvuhillya and State-owned enterprise Lvivvuhillya to the State Property Fund. The aim of this step is to find private investors for these enterprises. On 22 October, the Cabinet of Ministers proposed legally protecting these structures from the forced seizure of tax debts, as reflected in government draft law No. 16179.