News
07.08.2009
Government planning to return to selective VAT refunds to grain exporters
The government plans to return to the scheme of selective VAT refunds to grain traders, promising to repay its debt in exchange for their grain purchases from peasants for prices not lower than the government-set minimum ones.
The Cabinet of Ministers is going to pass a resolution on accelerated VAT refunds to those grain traders who buy grain from growers at prices not lower than the minimum price level. So, the officials are trying to encourage firmer traders’ prices, as farmers claim that the grain prices are low. Premier Tymoshenko emphatically stated that the State Tax Administration would refund VAT to traders solely upon presentation of a certificate evidencing their level of procurement prices.
The idea of influencing traders’ prices using VAT refunds as leverage is not new – the government tried to implement it in the summer of 2008. However, despite such measures, the past year was featured by an unprecedented collapse in prices for all cereals in late summer and in the fall.
