The Parliamentary Tax Committee has set up a working group to develop a draft law to reduce excise taxes on fuel for agricultural machinery.

Experts from the Ukrainian Agri Council will be part of this working group. Together with peoples’ deputies, representatives of the government, tax authorities, other experts and farmers, they will work on legal mechanisms for applying a 0.5 coefficient reduction to the excise tax rates on heavy distillates (gas-oil) intended for use by agricultural producers.

Over the next three months, the working group plans to prepare the relevant draft law and submit it to the Verkhovna Rada of Ukraine. We hope for effective cooperation and consideration of the interests of Ukrainian farmers.

Last week, the Verkhovna Rada of Ukraine adopted in the second reading and in general the government's draft law No. 11256-2 “On Amendments to the Tax Code of Ukraine on the Implementation of the Provisions of the European Union Excise Tax Acts”, which increased the excise tax on fuel from 139 to 330 euros per thousand liters by the end of 2028.

The Ukrainian Agri Council emphasized that this law was unfair to Ukrainian farmers, as agricultural machinery did not travel on public roads, for which this excise tax was increased. Moreover, Ukrainian farmers already pay twice as much excise tax on fuel as their European counterparts. And by increasing the excise tax to 330 euros, domestic agricultural enterprises will pay 5 times more, which puts them at a disadvantage compared to EU farmers.

However, realizing the importance of implementation of European legislation and supporting the financing of the army, farmers agree to pay higher excise taxes on fuel until the war ends. However, they ask to take into account the European experience and introduce fair approaches to excise taxation of the agricultural sector. Namely, to reduce the excise tax rate by 50% after the end of the war.

The final provisions of the voted draft law No. 11256-2 instruct the Cabinet of Ministers of Ukraine to work out the issue of introducing a 0.5 coefficient reduction to the excise tax rates on heavy distillates (gas-oil) intended for use by agricultural producers within three months from the date of entry into force of this law, to prepare a relevant draft law and submit it to the Parliament.