New Tax Bill: How It Will Affect Aluminum-Based Product Manufacturers

21.01.2025

In 2025, the Government of Ukraine introduced a new tax bill that proposes a range of changes to the tax regulation of industrial enterprises, particularly those involved in aluminum production.

This material will be useful for: CFOs of industrial enterprises, government relations professionals, manufacturing company owners, industry lawyers, and foreign investors.

New Tax Initiatives: General Overview

Current Status of the Bill
At the beginning of 2025, Ukraine’s Ministry of Finance submitted Draft Law No. XXXX to the Verkhovna Rada, which proposes amendments to the Tax Code concerning the taxation of manufacturing enterprises. The bill is currently undergoing public consultations and review by relevant parliamentary committees. Its primary goal is to increase tax revenues and align Ukrainian legislation with EU requirements in the areas of industrial policy and sustainable development.

Key Provisions Impacting the Aluminum Sector

The main innovations directly affecting aluminum product manufacturers include:

  • Introduction of an environmental tax on the processing of metal raw materials;

  • Elimination of import duty exemptions for aluminum foil used in manufacturing;

  • Transition to monthly VAT payments for enterprises with turnover exceeding UAH 20 million;

  • Clarification of eligibility criteria for tax credits on energy-efficient equipment;

  • Implementation of mandatory electronic reporting for aluminum product exporters.

Expert Assessment from the “UkrAluminium” Association

According to analysts at the Association, the new tax bill presents both potential benefits and significant risks for the industry. On one hand, encouraging production modernization through tax credits may help attract investment. On the other hand, the additional fiscal burden—particularly the environmental tax—could reduce the profitability of Ukrainian manufacturers, especially in the context of international competition.

Potential Market Implications

In the short term, the following impacts are anticipated:

  • A 7–10% increase in production costs;

  • Importers shifting focus to alternative markets;

  • Delays in upgrading production facilities;

  • Small enterprises potentially moving into the shadow economy.

However, in the medium term (2026–2028), provided businesses adapt and the bill is revised to reflect the Association’s positions, a leveling of conditions and even new opportunities—particularly for green investment—could emerge.

Conclusions

The new tax bill presents a challenge for the aluminum industry but also sets the stage for the development of energy-efficient practices. The “UkrAluminium” Association will continue to represent the sector’s interests in dialogue with the government and lawmakers to help shape a balanced tax policy.