State budget in the red: woodworking industry received more VAT than it paid in taxes
19 February 11:26
People’s Deputy Olga Vasilevska-Smaglyuk has published data which, according to her, indicates that the state is effectively subsidizing the woodworking industry through the VAT refund mechanism. This concerns the largest buyers of forest products in Ukraine against the backdrop of a zero quota on exports of coniferous wood and a long-standing moratorium on exports of roundwood, according to "Komersant Ukrainian".
What the deputy claims
According to information received in response from the State Tax Service of Ukraine, the top 20 largest buyers of timber in 2025:
- paid UAH 1.8 billion in taxes, fees, and social security contributions;
- received UAH 2.7 billion in VAT refunds.
Thus, the amount of VAT refunded was almost twice the amount of taxes paid. According to Vasilevskaya, this means that the state is actually “subsidizing” wood processing.
According to her, the annual timber harvest in Ukraine is 14–15 million cubic meters, of which about two-thirds are purchased by woodworking enterprises, and a significant part of their products are exported.
Criticism of the current model
The MP claims that the current model has several systemic distortions. In particular, restrictions on the export of raw materials work in favor of domestic processors, and the ban on the export of roundwood artificially affects domestic prices. In addition, through the VAT mechanism, the state essentially compensates for part of the industry’s costs.
At the same time, she says, there has been no significant increase in personal income tax revenues or any obvious effect in the form of “added value” in the budget.
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Appeal to regulatory authorities
Vasilevska said that she had appealed to the State Tax Service of Ukraine and the Economic Security Bureau of Ukraine with a request to verify:
the completeness of tax payments by companies in the industry;
- the validity of tax liability minimization;
- the legality of VAT refunds received.
- Who made it into the TOP 20 buyers of forest products
According to the deputy, the companies that together account for about a third of the market and purchased timber worth UAH 12.5 billion in 2025 include:
- Tsunami LLC
- Swiss Krono LLC
- Ukrainian Sawmills LLC
- Odek Ukraine LLC
- Brenvel LLC
- Typhoon-Plus
- UHLK LLC
- FOP Krupsky Roman Andriyanovich
- Kronospan Rivne LLC
- Kronospan UA LLC
- Agroprotechcenter
- Lviv-Pak
- Euroshpon-Smyga PJSC
- Ukrshpon LLC
- Korosten MDF Plant LLC
- Ukrgospovary
- Verba-VV LLC
- Barlinek Invest LLC
- Slav Forest LLC
- Euroshpon LLC.
Context
The debate over timber exports has been going on in Ukraine for several years now. Proponents of restrictions insist on stimulating domestic processing and creating added value within the country. Critics point to the risks of market shadowing, price distortions, and loss of budget revenues.
