[Summary translation prepared by Business & Human Rights Resource Centre]

JSC Marhanets Mining and Processing Plant caused damages to the city budget amounting to nearly 200 million UAH, 07 October 2024

In Marganets, Dnipropetrovsk region, the city-forming enterprise and largest taxpayer — JSC Marhanets Mining and Processing Plant (JSC MGZK) — has reportedly not paid local taxes for over a year, causing losses of around 183 million UAH to the city budget.

According to the local branch of the NGO Stop Corruption, the tax authorities granted the company an exemption from tax payments without proper verification, allowing it to delay payments until the end of the war and for six months thereafter.

Despite claims of wartime-related disruptions, investigations revealed that the company's administrative buildings were not damaged by shelling, and all documentation and equipment remained intact. It is suspected that the company may have falsified documents about damages to avoid tax obligations.

Legal experts note that, based on recent changes in tax legislation, the company was obligated to notify the authorities of its ability to resume tax payments starting January 1, 2024, but failed to do so.

Local activists and city officials see this as a coordinated act of tax evasion potentially involving inaction or collusion by tax authorities and courts. The resulting budget shortfall jeopardizes funding for essential municipal infrastructure already impacted by ongoing hostilities.