Mykolaiv commission did not support a tax break for Nibulon — risk of losing 100 million in tax revenue per year

Members of the standing budget committee of the Mykolaiv City Council at a meeting in Mykolaiv did not support the company «Nibulon»’s request for tax relief for the use of a water area and a land plot.

The committee considered a proposal to recommend that the executive authorities initiate the drafting of a decision to exempt the enterprise from paying taxes for the plots and water area that the company effectively cannot use due to the consequences of military actions.

During the discussion, councilman Serhiy Kantor insisted that the approach to any tax relief must be unified and clear for all business entities, and also raised the issue of selectivity in submitting companies’ requests for the committee’s consideration.

“The issue is divided into two parts: first — a reasonable approach in the case when we have the resources to create such incentives for the city’s enterprises. There must be clear items and criteria by which companies can, if voted on at a session, receive these benefits regarding property or land. The second question — why are we doing this selectively? Because today ‘Nibulon’ appealed to us, ‘Satelit-hold’ appealed, but there were more such companies during the martial law period. I officially contacted Vira Yevhenivna (director of the Department of Finance of the Mykolaiv City Council Vira Svyatelik, — editor’s note), received an official response,” said councilman Serhiy Kantor.

Kantor also addressed the committee chair Fedor Panchenko asking why not all similar appeals make it onto the committee’s agenda; Panchenko replied that he did not have the files his colleague referred to, after which Kantor promised to send the materials to the joint group for review.

“In this case, it is unclear whether the enterprises that appeal to us have approached the state or whether they meet the criteria,” said Serhiy Kantor.

Committee chair Fedor Panchenko noted that he does not have the full set of information regarding a number of appeals discussed at the meeting.

Nibulon representative Oleksandr Dolzhenkov explained that the company is forced to seek support due to a difficult situation, and that the mechanisms provided by law are effectively not applied because there is no procedure for entering information about contaminated territories into the state land cadastre.

“It is not out of a good life that we repeatedly appeal to the city council with a request to grant this benefit. Because the direct provision of the law on benefits outside local self-government bodies and military administrations — it does not work. Why? Because the benefit is applied if data about possible contamination or contamination of the territory is present in the state land cadastre. So, at the legal level there is no developed mechanism for transferring information to the state land cadastre, and, accordingly, the tax authority does not see these records and does not grant the benefit. Moreover, in such cases appeals are made on an individual basis: we are now talking about contamination of the water area specifically on an individual basis, since this is provided for by law. Once again, it is very important to note: it is impossible to develop unified categories for contamination of territories or water areas, as one respected deputy noted, because this is not provided for by legislation. I want to reassure the deputies again: we do not intend to reduce payments to the budget. We are now saying that as a result of optimization carried out by ‘Nibulon’, we are reducing the number of branches and employing our staff at the central office in the city of Mykolaiv,” explained Nibulon representative Oleksandr Dolzhenkov.

According to Dolzhenkov, the company does not plan to reduce tax revenues to the Mykolaiv budget and, thanks to regrouping personnel in the city, expects to ensure revenues of about 20–25 million UAH.

“We ask for the indicated benefit because the enterprise is indeed having a very hard time. At the moment debt restructuring and staff reductions are underway, and as you all know the water area is indeed not being used. We want to receive this benefit for only one year, I emphasize, and now it is already the end of April. Four months have already passed during which ‘Nibulon’ continues to pay,” said Nibulon representative Oleksandr Dolzhenkov.

Despite the arguments presented, the matter did not receive the necessary support in the vote: some committee members voted in favor, 3 deputies abstained.

“We should have initiated the drafting of a decision in accordance with the procedure, but we did not initiate it — there will be no draft decision,” explained committee chair Fedor Panchenko.

Earlier we wrote:

• New taxes already on the horizon? In Mykolaiv they plan to recalculate land value
• Kim asks for the names of deputies who are blocking the benefit for “Nibulon”: 100 million UAH and the company’s departure at risk
• “Nibulon” demands: unblocking the ports of Mykolaiv and Kherson — the key condition of a future agreement
• War and affected business: the city council reduced land taxes for entrepreneurs
• The government plans to take 90% of Mykolaiv’s water area, – Nibulon’s security director