Proposal of Ministry of Finance STATE OF SUMERIA

Proposal of Ministry of Finance STATE OF SUMERIA MINISTRY OF FINANCE http: //finance. gov. sum

FDI flow – forecast, USD million 1200 FDI + forecast 1000 FDI forecast + Sky. Tech 800 600 400 2009 2010 2011 2012 2013 2014 2015 2016 2

Unemployment compensations 8, 900$ 7. 00% unemployment 6. 80% 8, 400$ compensation, total 6. 60% Thousands 7. 20% 7, 900$ 6. 40% 6. 20% 7, 400$ 6. 00% 5. 80% 6, 900$ 5. 60% 5. 40% 2011 2012 2013 2014 2015 6, 400$ 3

Personal income tax, $ 1, 400, 000 1, 200, 000 personal income tax 1, 000 800, 000 600, 000 400, 000 200, 000 0 2, 012 2, 013 2, 014 2, 015 2, 016 2, 017 4

Trade balance comparison with Sky. Tech offer acceptation, USD bn.

Trade balance deficit with Sky. Tech offer acceptation, USD bn. 8%

Trade balance comparison without Sky. Tech proposal acception, USD bn.

Trade balance deficit without Skytech offer acception, USD bn. 8, 2%

Energy Production volume, mln. USD Energy costs, mln. USD 1 st year 2 nd year 3 rd year 19, 35 29, 00 38, 70 1, 35 2, 03 2, 71 - sufficient electricity transmission capacities => decrease of energy losses; efficiency growth; - additional workplaces and infrastructure improvement; - 95% of electricity is derived from imported natural gas => gas import growth => negative impact on national security and sovereignty; - extra costs for gas import. 9

THE CONSEQUENCES OF APPROVAL FOR THE TOURISM SECTOR AND RELATED SERVICES 120 12% number of arrivals, million 100 the CIT on tourism related activities 80 60 40 20 0 1995 2000 2005 2009 2010 2011 $22 million budget revenues in 2011 (0. 5%) Source: UNWTO for the region of Eastern Europe 10

Buildings for the investor $5. 2 per m 2 The average rental price for industrial premises $19. 5 per m 2 The average rental price for office premises $3. 3 million per year 11

Taxation Skytech proposal acceptation (10 -year-period) • 0% of corporate income tax • 0% of VAT • Expenses for a guarantee against amendments (during 10 years) • 6% tax on dividends, interests, royalties, management fees etc.

Taxation Our modifications (10 -year-period) • Corporate income tax: • 1 st 5 years – 0% • 2 d 5 years – 6% (+ 5. 46 USD mln) • 0% of VAT - • 6% tax on dividends, interests, royalties, management fees etc.

Tax revenues comparison • Skytech proposal • Our modifications

Modifications • Transfer of the production facilities to another free economic area Critical • Reduction of tax-free period from 10 to 5 years (in accordance with the Tax Code) Critical • Such a reduction is to be granted on condition that the investor develops the infrastructure, spending al least USD 5 million on that. Critical • NO reduced tariff on electricity. Negotiable (up to 5% discount) 15