The Ukrainian Agri Council welcomes the opening of the 8th session of the Verkhovna Rada of Ukraine of the 9th convocation. In the extremely difficult conditions of a full-scale war, the country continues to live, develop, provide itself and even other countries with food. To facilitate the work of farmers, who every day face new challenges in the tax, logistics, and military sectors, people's deputies should promptly adopt new laws. The UAC draws the attention of parliamentarians to draft laws important for the agricultural sector:

1. WORK UNDER OCCUPATION

The Draft Law No.7646 "On Amendments to the Law of Ukraine "On Ensuring the Rights and Freedoms of Citizens and the Legal Regime in the Temporarily Occupied Territory of Ukraine" Regarding Features of Activities in the Temporarily Occupied Territory of Ukraine" and Draft Law No.7647 “On Amendments to the Criminal Code of Ukraine on Improving Liability for collaborative activity"

Farmers whose farms are located in the temporarily occupied territories found themselves in a difficult situation due to the uncertainty of the legislation. On the one hand, their economic activity may be considered as a crime by Ukrainian law, on the other hand, the owner exposes himself to danger in case of refusal, for example, to fulfill illegal requirements for "re-registration" in the occupied territory. Therefore, the UAC calls for the adoption of the specified draft laws, which clearly distinguish the concept of "collaborationism" from the usual conduct of economic activity if it is not constitute assistance to the aggressor’s state.

2. TAX CHANGES

A) The law that will cancel the single tax of the 4th groups whose enterprises are located in the occupied territories.

Nowadays, farmers of the 4th tax group, who have lost the opportunity to cultivate their land and receive income, are forced to pay their own funds to the budget. This directly discriminates against single tax payers compared to other taxpayers and forces them to incur unnecessary expenses.

B) To postpone the introduction of the minimum tax liability (MTL) mechanism until 2023. The existing legislation of Ukraine in this area makes 2022 the first year for which the minimum tax liability is determined. That means, at the beginning of 2023, Ukrainian farmers must submit relevant reports and calculations on MTL.

However, in connection with the full-scale war with the Russian Federation, the introduction and usage of MTL mechanism may have negative consequences for agrarian business.

Therefore, it is important to initiate amendments to the Tax Code of Ukraine to postpone the introduction of the minimum tax liability mechanism and establish that the first year for which the minimum tax liability is determined is 2023 instead of 2022;

3. IRRIGATION

The Draft Law No.7577 "On Amendments to Certain Legislative Acts Regarding the Improvement of the Management System of Engineering Infrastructure Objects of State-Owned Land Reclamation Systems."

The adoption of this document will be a continuation of irrigation and drainage reform. In particular, the draft law provides for the creation of reclamation system operators. Thanks to this reform, the state, on its part, is creating a player that will have the desire to increase its own capacities, as well as have the financial capabilities that the existing balance-keepers of reclamation systems lack today. In turn, farmers will receive a real mechanism of control over the finances they pay.

4. PESTICIDES AND AGROCHEMICALS

To adopt in the second reading the draft law No.4558 on improving state regulation in the field of handling pesticides and agrochemicals.

The main norms of the document:

• detail the requirements for labeling pesticides and agrochemicals,
• lead Ukrainian legislation closer to EU legislation,
• lead terms definitions in line with the definitions provided by the EU’s legislation,
• strengthen the fight against falsified drugs.

5. FUEL STORAGE

Oil depots and fuel storage facilities of supplier companies and farms are at constant gunpoint of the aggressor’s country. During the period of active hostilities, farmers were forced to take fuel out of dangerous areas and pour it into any containers suitable for storage. At that time, the tax code considers such actions as sales that can only take place within certified warehouses. However, in the conditions of war, it is almost impossible to register new warehouses. Therefore, the UAC calls to consider the raised issues comprehensively and to initiate changes aimed at liberalizing the regulation of fuel circulation among farmers during the period of martial law.

6. RELATIONS BETWEEN SUPPLIERS AND TRADE NETWORKS

Ukrainian trade networks, taking advantage of their monopoly position, impose strict and unreasonable demands on suppliers and manufacturers. Numerous facts of an unfair markup, when a large share of the income from the sale of goods is taken by a retail chain. Often, the owners of large retail chains settle with suppliers late, payment terms for sold goods can be up to 120 days, which actually paralyzes the work of the manufacturer.

The UAC calls for the implementation of the Directive 2019/633 of the European Parliament and of the Council of April 17, 2019 on the prohibition of unfair trade practices and to adopt a draft law that clearly delimits the relationship between retailers and suppliers.

7. PATRONAGE DIVIDENDS

Effective operation of cooperatives will become possible only after the adoption of the norm on "patronage dividends". This term regulates the issue of taxation of income payments to its members from cooperative activities (to fixed tax payers). That means, an individual pays taxes from his activity. But the cooperative also pays tax on the sale of the same products.

Therefore, it is proposed to adopt the draft law No.4457-1, which aims not to tax the amount of individual’s income from the sale of own agricultural products, but introduces the payment of patronage dividends by the cooperative, if they do not exceed 50 of the minimum wages established by the law on January 1 of the reporting year (tax) year.