October 3 2003, 11:16 APK-Inform

VAT preferences to millers and bakers will not solve problems of the industry

The VAT preferences, should they be granted to producers of flour and bread, will not solve the problems of these industries, General Director of bread baking Association "Ukrkhliboprom" Olexandr Vasylchenko thinks.

A bill has been registered in Parliament, stipulating, among others, the mechanism of partial compensation of losses to producers of flour and bread by way of granting special preferences to these enterprises in payment of VAT.

Vasylchenko believes this measure will not help the plants to solve all their problems. "We think this measure will cover only 50 percent of the losses. This is not enough", he said.

As we already reported, bread bakers had applied to government with a claim to take cardinal measures as regards price formation in the industry. Bread baking and flour milling industries have been suffering losses resulting from price regulation and restriction of profitability of baking and milling plants on the part of government.