The Group provided 64% tax revenues of the local community
The Ferrexpo Group paid UAH 6.3 billion in taxes to all level budgets in 2022 in Ukraine, the press service of the company responded on the GMK Center request.
Ferrexpo increased its payments to the local community budget by 13% and the amount of royalty (rent payments) for subsoil use – by 70%, regardless of the 46% reduction in output, 24% reduction in iron ore prices on global markets (Fe62% CFR China). The increase in the amount of rent payments was due to the corresponding changes in the Tax Code regarding the mechanism for calculating rent for the use of subsoil for the extraction of iron ore.
Ferrexpo remains a key taxpayer in the region. In 2022, the Group provided UAH 534 million or 64% of tax revenues to the budget of Horishni Plavni (Poltava region), which is the center of Ferrexpo’s activities.
The Group’s contribution at the Poltava region level is also significant – 29% in tax revenues of the budget of the Poltava region in 2021, according to GMK Center calculations. In other words, Ferrexpo ensures the development of a city of 55,000 people and a region with a population of 1.5 million people.
The importance of the Group’s activities at the state level also should be noted. This is evidenced by the fact that Ferrexpo Poltava Mining is among the 10 largest payers of income tax, royalty (subsoil rent) payments and environmental tax in Ukraine from year to year.
Ferrexpo has paid 725 million US dollars in tax payments to budgets of all levels over the past five years, according to the annual average official exchange rate of the hryvnia to the US dollar.
“The challenges created by the war in Ukraine strengthened Ferrexpo as a major taxpayer. We continue to work, supply products to our partners, provide people with jobs, create value and provide tax revenues to the budgets of Ukraine. This is a guarantee of wellbeing in Ukraine today and its development and restoration in the future,” said Ferrexpo CEO Jim North.
As GMK Center reported earlier, in 2022 Ferrexpo produced 6.053 million tons of pellets, which is 46% less than in 2021. Production of DR pellets with 67% iron content in 2022 decreased by 18% y/y – to 353,000 tons. During the year, the production of DR pellets accounted for 6% of the total production.