Expert opinions regarding the reduction of VAT rate on agateware fled

President of Ukraine signed the Verkhovna Rada adopted in December last year, the law, which is reduced from 20% to 14% rate of VAT on the supply by the producer of such agricultural products: pigs, cattle, milk, wheat, rye, corn, barley, oats, flax, soybean, rapeseed, sunflower and other oilseeds, sugar beet.

However, some experts believe that the new law will have a negative impact on the processing sector of the agricultural complex.

Experts from the Kyiv school of Economics believe that the law is contrary to the principles of the Memorandum between Ukraine and the IMF, which provides for "refraining from introducing new exemptions from payment of taxes." In addition, the document does not meet the provisions of the Association Agreement with the EU, according to which Ukraine has committed to approximate its legislation to the European, particularly in parts of the EU Directive No. 2006/112 from 28ю11ю2006 on the common system of VAT, which implies "a reduced rate of VAT for items only direct consumption, not production."

at the same Time, experts of the European Business Association, which includes the largest agroexporters country, I support the new law, and note that commensurate with the reduction in the VAT rate on operations with the listed crop will decrease the amount of budget claims in the export of grain and products of its processing. This will minimize the risks of losses related to fraud in the payment of VAT and practices of the understatement of tax liabilities, and promote the legalization of agricultural production. The new law will increase the volume of investments into the sector, which will enhance the competitiveness of domestic agricultural complex.

the experts of the dairy Committee of the EBA believe that milk should not be subject to the new law, and predict that even after the reduction of the VAT rate to 14%, the selling price of milk VAT processors will remain unchanged, that is actually the market value of raw milk will increase. This will increase the price of finished dairy products and reduce the consumption of Ukrainians quality of milk.

Therefore, the EBA called VR in the near future to amend the Tax code to exclude from this list of whole milk to avoid the negative effect of the adopted Law.