Notice from the Association

During May–June 2025, the Association received several letters from crushed stone companies that are members of the Association, requesting that the Association approach government authorities to revise the legislatively established minimum value used to determine the actual selling price of extracted mineral resources classified under code 2517 of the Ukrainian Commodity Classification for Foreign Economic Activity (UCCFEA).

In this regard, the Association states the following.

The Law of Ukraine dated October 10, 2024, No. 4015-IX, “On Amendments to the Tax Code of Ukraine and Certain Other Laws of Ukraine Regarding Ensuring Balanced Budget Revenues During Martial Law” (hereinafter — Law No. 4015), introduced amendments to the Tax Code of Ukraine. These included changes to the calculation of the value of mineral products for the purpose of paying rent for subsoil use, based on the actual selling prices of extracted mineral resources (mineral raw materials).

The basis for adopting Law No. 4015 was Draft Law No. 11416-d, submitted on August 30, 2024, by Members of Parliament from the Verkhovna Rada Committee on Finance, Tax and Customs Policy (hereinafter — the Committee).

In the revised Explanatory Note to Draft Law No. 11416-d, prepared by the Committee:

• The section “Justification for the Need to Adopt the Draft Law” states:
  “The development of this draft law is driven by the need to increase budget revenues through tax inflows to ensure the proper functioning of the economy and to guarantee the implementation of national security and defense measures in response to the military aggression of the Russian Federation against Ukraine.”
• The section “Objectives and Tasks of the Draft Law” states:
  “The purpose of the draft is to improve certain provisions of the Tax Code of Ukraine and to create conditions during martial law for the proper functioning of the economy and adequate budget revenue generation through tax collections.”

The full-scale military aggression launched by the Russian Federation in February 2022 continues to require significant financial resources to sustain Ukraine’s economy and, above all, to meet the needs of the security and defense sector.

During a speech to the Verkhovna Rada of Ukraine on June 5, 2025, Minister of Finance Serhii Marchenko stated that current funds are insufficient to finance the Armed Forces of Ukraine, and therefore amendments to the state budget for the current year are necessary.

On June 11, 2025, the Head of the Verkhovna Rada Budget Committee, Roksolana Pidlasa, announced that the Government is preparing a draft budget amendment to allocate an additional UAH 400 billion to support the security and defense sector.

An analysis of the letters received from crushed stone companies revealed that in Q1 2025, compared to the same period in 2024, some companies experienced a decrease in extracted mineral volumes and revenue from product sales, despite an increase in total rent payments for subsoil use. At the same time, other companies reported that the increased rent payments had no impact on their production volumes or revenues from sales.

Therefore, considering the opposing trends in production and sales across companies, and the relatively short timeframe analyzed (only one quarter, two months of which fall within the winter period), it is not possible to draw a general conclusion about the continuation of such trends in the future.

The issue of whether to submit an official request to state authorities may be reconsidered following further submissions from crushed stone companies and after evaluating performance indicators over a longer period of their business operations.

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