“Mykhailo Polyakov Co-Chairman of the Committee of the American Chamber of Commerce in Ukraine, Deputy General Director for Corporate Relations “Philip Morris Ukraine” It is cheaper to produce for Ukraine in Krakow than in Lviv. Why so? October 16, 04:18 Share: We are sure that the state will help us remain one of the largest taxpayers in Ukraine. But we are not sure that it will help us to remain a reliable employer in the country. Our company has three main priorities —”, — write on: ua.news
We are sure that the state will help us to remain one of the largest taxpayers in Ukraine. But we are not sure that it will help us to remain a reliable employer in the country.
Our company has three main priorities — to remain the top-taxpayer, top-investor, and top-employer in Ukraine. According to them, we distribute the resources we have. And if the state will take much more resources to pay taxes, then they simply will not physically remain to support employees and support investments.
We are very happy to have opened a factory in Lviv, but I took calculations, comparing the costs of manufacturing products in Lviv and in Krakow, Poland. We are just in the cluster where Poland is the main market. So the conclusion is it is more expensive to produce for Ukraine in Lviv than to produce in Krakow and bring to Ukraine.
This is due to reserve of workersbecause the risk that a male employee will not go to work tomorrow is much lower in Krakow. They also influence anxietyduring which lines have to be stopped. And, of course, a very painful question – electricity supply. Many factories have now appeared in the Lviv region. And the power supply system was not designed for such a large number of enterprises. A question arises curfew hours — working people are not ready to move during the curfew. Our company is not entitled to any privileges from special passes in any case.
All this together imposes additional costs — it would be at least 10% cheaper for us to produce cigarettes in Poland and import them to Ukraine.
Now we are very much waiting and hoping for the government’s decision on tax rates for next year. We don’t have a plan B or a plan C. We have a plan A – we set the tax rates that are provided for by the government bill 11090. This bill was passed in the first reading back in the summer, we expect it to be passed in the second reading.
The government draft law is supported by all the largest business associations in Ukraine. And we hope that the government’s version will be supported in the parliament in the second reading, and not the populist calls that taxes should be increased tenfold so that the budget receives even more. Because if these slogans win, unfortunately, one of the company’s three priorities will remain: top-taxpayer. We will remain the largest taxpayer, but we will not be able to be a large employer and investor. And this choice will be made for us. Then the question of the necessity of the existence of the factory in Ukraine will arise.
The material was created on the basis of a discussion during the NV event “Business and War. Dialogues about the future”.
