Ukrainian farmers got another "gift under the Christmas tree", which could cause a devastating blow to the domestic agrarian sector.

The State Fiscal Service proposed to exempt from VAT payment operations on the supply of goods in the customs territory of Ukraine and export of grain crops, oilseeds and vegetable oils in the customs regime. According to preliminary calculations, in case of implementation of this decision, the loss of the agrarian sector will amount to about UAH 50 billion. Instead, SFS proposes to partially offset the losses incurred at the expense of state support. As the experience of previous years shows, state support is not working. So agricultural producers will not receive this money.

"Last year, the agrarian sector faced the problem of "oil amendments" when small and medium-agrarian businesses tried to eliminate VAT refunds when exporting oilseeds. Now, the SFS initiates VAT exemptions for the sale of cereals and oilseeds, and not just soy and rape, as in the past year. In addition, not only export but also operations inside the country will be hit. This will deal a crushing blow to the landowners", - said the head of the UAC Andriy Dykun.

The fact is that farmers are currently charging 20% ​​VAT in the price of the goods. In case of cancellation of taxation, farmers will also be exempted from the budget reimbursement of the amount of tax paid. This, in turn, will lead to financial losses for farmers and an increase in the cost of production. As a result, farmers will be unprofitable to export cereals and oilseeds, as prices on the world market will remain unchanged at the same time. And the growth of supply within the country will lead to a reduction in purchasing prices for these crops in the domestic market.

The Fiscal Service recognizes that the appropriate step will lead to loss of grain and oil producers, and therefore proposes state support for partial compensation of losses. However, in 2018, the ineffectiveness of the existing mechanisms for allocating subsidies to the agro-industrial complex was proved. Thus, according to the data of the Unified Web portal of public funds use, as of December 27, 2018, the provided programs were only 31% executed - from the formally allocated to farmers UAH 6.335 billion, agricultural producers received only UAH 1.951 billion.

The Ukrainian Agri Council emphasizes that constant attempts to plunder agricultural producers lead to a disruption of the coordinated work of the agro-industrial complex, which is the locomotive of the development of the domestic economy and generates 42% of currency revenues to the budget and about 17% of Ukraine's GDP.

Thursday, 10 January 2019