The fee is proposed to increase by three years from 10 to 35 euros per tonne.
Association of metallurgical enterprises Metallurgprom, Ukraine (Dnepropetrovsk) and the Federation of metallurgists of Ukraine (FMU) to urge MPs to support registered in the Verkhovna Rada the draft laws on increase of export duties on ferrous scrap from 10 euros to 35 euros per ton for a period of three years, and to abolish the 5% import duty on this raw material.
As stated in the letter of the heads of the unions to address parliamentary committees, in 2015, there was an acute shortage of metal, caused by the export of raw materials. According to them, the export of raw materials from the country in 2015 reached 1.2 million tons, which is the highest figure for the last 10 years. Main export became Turkey (77%) and Transnistria (21%).
The letter notes that due to the high-margin domestic market and proximity to export markets (Turkey), as well as non-market preferences of the government of Transnistria metallurgy of these countries can offer a better price for scrap than Ukrainian producers. The ability of metallurgists to bring scrap from abroad is limited to 5% import duty in Ukraine and export duties in countries which are potential exporters of scrap metal.
Chapter metallurgproma and the FMU stated that in January 2016 there has been a significant deterioration in the security of metallurgists scrap supplies to enterprises amounted to about 160 thousand tons, 100 thousand tons (38%) than in December-2015.
As a result, the reserves of metal in warehouses of the enterprises in January decreased by 30 thousand tons and now account for about 75 thousand tons, whereas in the beginning of 2015, the reserves amounted to 235 thousand tons. The shortage of scrap is saved for export supply and the impossibility of imports of this raw material, this year the situation becomes critical. Therefore, if earlier the discussion was about whether to export metallurgy unclaimed balance of prepared scrap, but this year all exports will mean a deficiency of raw materials of Ukrainian plants, the letter reads metallurgists.
In this Chapter, metallurgproma and the FMU emphasize that when exporting scrap metal, the state loses millions in tax revenue. So, with tons of exported scrap metal, the state gets only about 240 hryvnia export duties, and with the tons of scrap melted into steel, the state receives 2100 hryvnias of taxes. That is, the processing of scrap in the country would generate additional taxes, which is 9 times higher than the export duty, according to the metallurgists.
Besides, business on the harvesting and export of scrap metal operates mainly in the informal mode.
Please note that to ensure national security and stability of metpredpriyatiy these bills must be considered simultaneously. Please take into account the position of participants of the metallurgical industry on the relevance and timeliness of these draft laws in the framework of action to support the domestic metallurgical industry of Ukraine, in particular, with the aim of increasing the defense capability of our state and recovery of strategically important infrastructure is summarised in the letter.