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Naftogaz Group paid UAH92.5bn to the state and local budgets in January-August 2020, including UAH39.6bn of remaining dividends for 2019. Revenues from Naftogaz Group exceeded 17% of total state budget revenues in January-August 2020. Naftogaz Group remains Ukraine’s biggest taxpayer. In 2019, Naftogaz Group’s tax and dividend payments to budgets of all levels totalled nearly UAH121.4bn.
6.1.4 Budget dynamics - privatization
Chipping away at state ownership of property 30 years after the collapse of communism, the State Property Fund auctioned 142 ‘small’ lots last summer, netting $46mn. The headline grabbing sale was of Kyiv’s Dnipro Hotel, which netted $40mn. By the end of this year, Dmytro Sennychenko, head of the Fund, hopes the sales total will hit $100mn.
Three distilleries – one in Kharkiv, and two in Vinnytsia – go up for auction in October in the first concrete step to dismantle Ukrspyrt, the state alcohol giant. With starting prices range from $700,000 to $1mn, the sales will be on ProZorro.Sale. The goal is to sell all 41 viable properties of Ukrspyrt, ending the state alcohol monopoly and earning the treasury $75mn.
By the end of this year, the government plans to privatize: Kyiv’s President Hotel, the Odessa Port Plant, the Electrotyazhmash plant, the Krasnolimanskaya Coal company and the United Mining and Chemical Company. On September 8, the Cabinet of Ministers approved this list. A Rada vote will be needed to lift the freeze on privatisations, approved last spring, at the start of the coronavirus quarantine, Svetlana Panaiotidi, deputy economy minister, wrote on Facebook.
The State Property Fund (SPF) is discussing the possibility of doubling the plan of privatization receipts in 2021, to UAH12bn, with the lawmakers and the government of Ukraine, Head of the SPF Dmytro Sennychenko has said.
"The plan, which has now been submitted in the government budget to the Verkhovna Rada for receipts from privatization in 2021, is set at [UAH] 6bn. We are now communicating with members of parliament, the government and clarifying the budget indicators for next year. We will propose its increase ... up to [UAH] 12bn," he said at a press conference at Interfax-Ukraine on Tuesday.
Sennychenko said that the SPF has drawn up a list of facilities for privatization for the next year, which includes regional gas supply companies, the Bilshovyk plant and the United Mining and Chemical Company (UMCC).
He said that at the start of the "coronavirus crisis" in March 2020, the Verkhovna Rada lowered the bar for budget receipts from privatization to UAH500mn, specifying that in 2020 the SPF exceeded it. At the moment, proceeds from privatization are UAH2bn, and by the end of the year they are expected to reach UAH3bn, the head of the fund said.
"This [the amount of proceeds] will also depend on the necessary financing steps, because one hryvnia invested in the audit of the creation of technical
42 UKRAINE Country Report October 2020 www.intellinews.com
