In 2023, the tax office reimbursed businesses 63% of VAT, but in 2024 this indicator will decrease

In 2023, the State Tax Service (SST) of Ukraine reimbursed only 63% of the requested VAT, revenues from which accounted for one fifth of the state budget's revenues in 2023.

In 2023, VAT on imported goods increased by 1.4 times compared to 2022 to UAH 366.2 billion, which almost corresponds to the figure of UAH 380.7 billion in 2021. At the same time, VAT on goods produced in Ukraine increased by 10% to the level of 2021.

The VAT refund situation has also improved, but remains worse than before the war. In 2023, the tax office reimbursed UAH 78.5 billion. or 63% of the request, which is 1.6 times less than in 2021. At the same time, analysts note that requests for reimbursement decreased by 1.4 times compared to 2021.

Over the past 4 years, the smallest amount of VAT was reimbursed in 2022 - only 48% of the request, the largest - in "February" 2020 - 97% of the request.

In 2023, VAT on domestic goods (including reimbursement) amounted to 8.6% of the budget, and on imported goods - 11.5%. In general, in 2023, VAT provided 20% of revenues to the state budget, compared to 25% in 2022.

According to market participants, in 2024, VAT reimbursement for the export of agricultural products became more difficult due to a lack of budget funds and uncertainty regarding financial assistance from the United States. If the funds from the USA do not arrive, Ukraine will have to review budget expenditures, and first of all, the amounts for VAT refunds. Banks are already informing clients who received loans under the 5-7-9 state programs that the fund has been delaying interest payments for more than 6 months.

Today, traders buy agricultural products, counting on reimbursement of 90-100% of VAT, which keeps prices at a high level. If the VAT refund ends, traders may revert to the practice of 2022, when they paid the price excluding the VAT refund, which would collapse purchase prices by 14%.