Reducing the VAT rate to 14% on some types of agricultural products will bring the agricultural sector out of the shadow, create equal tax conditions and increase the working capital of agricultural producers. And this in turn will stimulate the agricultural sector development.

This was emphasized by agricultural producers and called on the President to sign the draft law №3656 adopted by the deputies as soon as possible.

Reducing the VAT rate, farmers explain, will not lead to budget losses, and farmers will be able to use the saved funds for the development and modernization of farms.

“Budget losses are not expected, as the VAT rate on final consumer goods remains at 20%. Accordingly, the price of goods will not change, and the state budget will continue to receive 20% of finished products. The state will get what it should get, because the final VAT is paid by the buyer. The manufacturer will save working capital. This will allow, especially in the spring, not to "launder" money from circulation, not to take additional loans, "- the head of LLC "Agro-Classic" from Rivne region Volodymyr Prysiazhnenko said.

In addition, lowering the VAT rate is a serious step towards de-shadowing the grain market. After all, 40% of the land is currently cultivated illegally. Products from these lands are not accounted for anywhere and, accordingly, no taxes are paid to the budget.

The reduction in the VAT rate makes the so-called "twists" unattractive - fraudulent schemes for the illegal grain sale, as a result of which VAT is returned from the exporter's state budget, which was not actually paid. This will bring many agricultural producers out of the shadows. This will encourage those who work illegally to work officially," the head of AE "Adelaide" from the Kherson region Serhii Rybalko said.

The leading public union “Ukrainian Agri Council” supported the reduction of the VAT rate on intermediate agricultural products. At the same time, the association called for a reduction in the tax rate on finished products. In particular dairy products (milk, sour cream, cheese, butter), beef and pigs; sausages and offal from the corresponding meat and sugar. This will help to reduce the price of these products in stores and increase the purchasing power of Ukrainians.

It will be recalled that on December 17, 255 People's Deputies supported in the second reading and in general the bill №3656 on amendments to the Tax Code on the VAT rate on transactions for the supply of certain types of agricultural products.

The law sets the VAT rate at 14% for the supply and import of the following agricultural products to Ukraine: 0102 (livestock); 0103 (pigs); 0401 (for whole milk), 1001 (wheat), 1002 (rye), 1003 (barley), 1004 (oats), 1005 (corn), 1201 (soybeans), 1204 00 (flax seeds), 1205 (feverfew seeds and rapeseed), 1206 00 (sunflower seeds), 1207 (seeds and fruits of other oilseeds), 1212 91 (sugar beets).

UNIAN