Relationship between metallurgical works and the budget: debt increases, taxes decline

Large enterprises of ferrous metallurgy consolidate a significant share of cash flows and are important taxpayers for the budget. In 2008-2013 two-thirds of the aggregate profit tax from the ferrous metallurgical industry were provided by seven largest plants: Novolipetsk Steel (NLMK); Cherepovets Steel Mill (CherMK); Nizhniy Tagil Iron and Steel Works (NTMK); Magnitogorsk Iron and Steel Works (MMK); Oskol Electrometallurgical Plant (OEMK); West-Siberian Metallurgical Plant (ZSMK) and Chelyabinsk Metallurgical Plant (ChMK). All these plants are the key assets of the largest multinational corporations; therefore, the analysis of their statements makes it possible to assess the financial condition not only of individual corporations, but also of the whole ferrous metallurgy. The article presents the results of the analysis of the financial statements of the leading domestic enterprises of ferrous metallurgy for 2008-2013. Particular emphasis is placed on their relations with the budget in the field of profit tax administration. The author investigates the factors in the formation of profit before tax and reveals the destructive impact of the existing tax legislation on the mobilization of budget revenues. The article draws a conclusion about the role of large enterprises in the economic development of the country and its regions. The author proposes several options to change the tax policy in relation to large taxpayers.