Analysis and Characterization of the Report on Payments in Favor of the State on the Example of Extractive Companies

Abstract

The article analyzes the activities of enterprises in the oil industry and highlights the main powerful oil producing companies of Ukraine. In the course of the analysis, it was found that the State receives a large share of tax revenues in the budget from extractive industry enterprises. The reason for this phenomenon is the presence of a large number of mineral deposits located on the territory of Ukraine. The standard and reports of the Extractive Industries Transparency Initiative (EITІ), which provide high-quality disclosure of information on the state of affairs in the country’s extractive industry and transparency in the management of natural resources, are analyzed. The main characteristics and features of reports on payments in favor of the State are determined (the items analyzed were: form, content, reporting period, financial indicators, number of employees, frequency of submission, publicity, terms of publication, subjects of inspection). The legal regulation, in particular the Law of Ukraine «On Ensuring Transparency in Extractive Industries», the preparation of such reports, the types and amount of liability for failure to prepare reports on payments in favor of the State are analyzed. The analysis showed that the application of fines and the implementation of domestic legislation positively affects the regularity and correctness of reporting on payments in favor of the State. The implementation of legislation and the development of recommendations for writing a report of companies in the oil sector allows to publish information indicating not only the amount of the State budget revenues, but also the quality indicators of the activities of such companies. The world experience of using tax revenues to local budgets is analyzed, which leads to rational and fair distribution of funds in the interests of all parties to the process of consumption and use of natural resources. According to the analyzed reports of oil-producing foreign companies, the main ways and directions of application of tax revenues and their effectiveness are identified.

Keywords

• extractive industry
• non-financial reporting
• social responsibility
• sustainable development
• report on payments in favor of the state.