News
02.04.2013
Tax incentives efficiency in AIC decreases solely due to slick legislative changes - UCAB
Efficiency of tax incentives in agriculture decreases due to inconsiderate legislative changes that lead to a situation, when the actual amount for industry support through tax incentives is significantly lower than the declared one. This was stated by the Association "Ukrainian Agribusiness Club" (UCAB), commenting on the widespread media reports on the inefficiency of tax incentives for agriculture development.
According to calculations, made by UCAB, the actual amount of tax incentives for farmers reduced significantly in 2012. Whereas before 2012 farmers had preferential VAT treatment, leaving VAT amounts for their own needs (p.209.6 Article 209 of the Tax Code of Ukraine), at the same time having VAT refund for exports of grain and industrial crops, starting from 2012, VAT for exporters is not refunded (subject to paragraph 15 of subsection 2 of section XX of the Tax Code of Ukraine). This leads to purchase price cut for grain and industrial crops in the domestic market, comparing to global prices.
"Indeed, the growth rates of agricultural production halt slightly in 2008-2012, but this was the result of increasing fiscal pressure on farmers in this period," – the Director General of UCAB Volodymyr Lapa says. Consequently, once again it emphasizes on the importance to preserve tax benefits for industry development.
Mr. Lapa claims that a slight lagging in the development of agriculture is connected with the reduction of the direct budget support to the industry, instability of funding (even those programs, for which the allocation of funds from the special budget fund (for subsidies to farmers) is presupposed, are not financed to the full extent), outstripping rising prices for inputs under conditions of food prices regulation, rising land lease costs under conditions of indexation of the normative monetary evaluation of land and many other factors.
According to Mr. Lapa, now farmers are finishing the complex calculation of the effect from tax benefits use, which will be sent to the Ministry of Agrarian Policy and Food of Ukraine, the Ministry of Income and Tax of Ukraine, as well as to peoples deputies of Ukraine.
"We really hope that our estimation will be considered, and mistakes, such as the recent introduction of export duties on grain that has not brought the expected budget receipts, but put agricultural production in jeopardy instead, will not be made again", -Mr. Lapa says.
Association "Ukrainian Agribusiness Club"
Velyka Zhytomyrska str., 20 А, office 53, Kyiv, 01001
Phone: +380 44 201-4950
Fax: +380 44 201-4951
099 272 59 30
Tetiana Kotyk
www.agribusiness.kiev.ua
The Association "Ukrainian Agribusiness Club" (UCAB) www.agribusiness.kiev.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.
