December 10 2003, 15:17 Interfax-Ukraine

Agrarian faction proposes to renew VAT refund in exports of farm products in 2004

Leader of the Parliamentary Faction of the Agrarian Party of Ukraine Katerina Vashchuk proposes to renew in the next year the procedure of VAT refund in exports of agricultural products and to resume the payments in bills in settlement of VAT at grains imports, which was cancelled by the Law of the 2004 State Budget, passed by parliament on November 27.

The explanatory note to the bill that has been submitted by Ms. Vashchuk to parliament for consideration, reads that the cancellation of VAT refund in exports of agricultural products will result in considerable drop in exports and will cost the state more than $2 billion of losses. The losses of farmers from reduction of exporters' purchasing prices for their products (for the size of the non-refunded VAT), according to the document, will make $300 million.

Besides, the author of the bill considers it necessary to renew usage of bills in payments of VAT at grains imports. She said such a mechanism had made it possible to considerably intensify supplies of import grain in this year.

"The possibility to save 20 percent of grain importers' current assets till the moment the grain has been sold will allow at 20 percent increasing the import purchases, which is of paramount importance in conditions of permanent price increase in the world market, and the attempts of Russia's and Kazakhstan's governments to restricts the exports of grain crops", the explanatory note runs.

The Ukrainian agricultural NGO's have applied to the government of Ukraine with a request to resume in 2004 the current procedure of VAT refund at exports and the possibility of payments in bills at impost of grain, for the cancellation of these mechanisms would entail losses to agricultural producers.