Abolition of the tax on the land under railway tracks and the excise tax that is paid to the State Road Fund, along with reduction of costs, would enable the Ukrainian Railways joint-stock company (Ukrzaliznytsia) to save USD 310 million, which it could use to purchase new locomotives and carriages.
Ukrzaliznytsia’s Board Chairman Volodymyr Zhmak stated this in an interview with the Kyiv Post newspaper, the CFTS portal reports.
"The company pays USD 150 million a year for the land under railway tracks. No other country taxes the land under railway tracks. Ukrzaliznytsia also pays an excise tax of USD 50 million to the State Road Fund, which is used to finance repairs of roads and not rail tracks," Zhmak said.
According to him, Ukrzaliznytsia can save USD 310 million and use this money to purchase new locomotives, railcars, etc. if these taxes are abolished and if the company reduces some of its costs, since a significant part of its rolling stock was built during the Soviet era.
"We need to try to generate money without increasing tariffs and by reducing our costs," Zhmak said.
As reported, the Ministry of Finance recently proposed purchasing railcars with funds generated from speeding fines. However, Minister of Infrastructure Vladyslav Kryklyi opposed this proposal, saying that this was amount to inappropriate use of resources.
As the CFTS portal reported earlier, Zhmak has said that the government is preparing to submit a proposal to introduce new programs in the state budget for 2021 to the parliament. According to him, this includes a program for renewal of passenger rolling stock, which will provide for allocation of UAH 3.288 billion for purchase of 100 passenger cars, and the Railway Infrastructure Modernization Program, which will provide for allocation of UAH 1.179 billion. Funds for purchase of passenger rolling stock could be allocated from the state budget for the first time since Ukraine gained independence.