An increase in the tax on the extraction of Ukrainian gas (rent) will lead to a deterioration of the country's investment attractiveness.
Dmytro Khoroshun, an analyst at Concorde Capital investment company, is certain of this.
"The proposed change in the natural gas rent mechanism in Ukraine will reduce the return on equity much more than a similar recent change in the iron ore royalty. Ukraine's investment attractiveness as a whole will also suffer," the analyst's report said.
According to Concorde Capital analysts, the government will seek to raise rents from April 1, but they concede that through the government's dialogue with mining companies, specific tax rates may be reconsidered.
"We believe that negotiations (between Ukrainian natural gas producers and the government) to change the proposal may be appropriate. In particular, we do not exclude that royalty rates in the final wording of the law will be lower than in the draft of February 9," - concluded in the investment company.
On 9 February, the Verkhovna Rada registered a bill that proposes to increase the gas extraction royalty to a record high of 69% in the country's history.
