Due to implementation of the existing proposals to change the tax system of AIC, farmers may suffer loss amounting to about 20 billion UAH. This was stated by the Association "Ukrainian Agribusiness Club" (UCAB), on the basis of analysis of legislative proposals and concepts for tax legislation changing.

Volodymyr Makar – the Vice President of UCAB – believes that the mentioned amount is a kind of an anti-record over the years of Ukraine's independence. "Never before have there been such large-scale attempts to revise the tax system in agriculture", - says V.Makar. According to him, the implementation of tax innovations together with losses from adverse weather conditions in 2012 (13.6 billion UAH according to the Ministry of Agriculture and Food for the spring-summer period) will result in the total unprofitability of the sector.

"Gains of the entire agricultural sector in 2011 amounted to less than 26 billion UAH. They were made by 42.6 thousand of enterprises and farmers that employ 580 thousand people in the rural areas. In case of cancellation of the VAT exemptions most households will operate at a loss and will not have the posibility for further development but will try to survive", - Makar said.

UCAB experts claim that among the issues that farmers are most concerned about,are the termination of sectoral VAT exemptions, provided by the concept of reforming the tax system, proposed by the State Tax Service (annual loss of farmers from such measures will make up more than 13 billion UAH) and cancelling of VAT refund on export of grain and industrial crops that has been already provided by the Tax Code (about 6 billion of annual loss). In addition to this, there are other legislative proposals, like draft law amending Article 209 of the Tax Code of Ukraine (concerning the peculiarities of VAT payment for agricultural enterprises) with registration number 10731 and others.

Commenting on the presence of such a large number of proposals, Volodymyr Makar said that they contradict the experience of our closest neighbors. "For example, Russia is doing everything possible to preserve and extend the tax exemptions for farmers, fulfilling the requirements of WTO entering and at the same time not questioning the VAT refund on export" - the expert said. He expressed hope that similar policy aimed at establishing long-term favorable working conditions for farmers will be held in Ukraine. 
 

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
[email protected]
Tetiana Kotyk
www.agribusiness.kiev.ua

The Association "Ukrainian Agribusiness Club" (UCAB) http://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.