February 5 2008, 09:27

Ukraine: introduction of 20% VAT will result in losses for agricultural producers

According to UNIAN information, if Verkhovna Rada adopts the changes to VAT charging (in view of Ukraine's entrance to WTO), the agricultural producers will have the total sum of losses worth to UAH 1.4 billion ($274.5 mln.). This was the opinion of Yuri Luzan, First Deputy Minister of Agrarian Policy.

"Ukraine undertook obligations to WTO to adjust the taxation; but, the introduction of 20% VAT will lead to losses for agricultural producers. According to estimations of Tax Administration, Ministry of Finance and or Ministry, this sum will amount to UAH 1.4 billion for agricultural producers", Yuri Luzan said.

He says that if the Parliament adopts this draft law, it will enter into effect on the first of April. In particular, the draft law provides the changes in the mechanism of donation allocation for livestock products (milk and meat) and VAT changes.

"In this case there is a plan to reimburse the losses of agricultural producers by means of donations from the general foundation of state budget; however, the producers will have no operational assets in the period when they are waiting for reimbursement. The independent experts think that a lot of "crooked" schemes will be created while using the donation to meat and milk producers, for example, untimely payments for the population. I.e., many processing enterprises will use VAT for the own purpose", Yuri Luzan said.