The Verkhovna Rada’s refusal to cancel the special regime of VAT administration in the agricultural sector proves the MPs’ realization of a difficult situation in the industry. This is how a deputy of the “Samopomich” Union faction, Ivan Miroshnichenko, commented on the results of the parliamentary vote for the bill №2173.
He noted that on June 17 during a hearing in the parliamentary agricultural committee, a resolution was adopted to prevent the abolition of a special regime from January 1, 2016. “On the basis of the official statistics we warned about the negative consequences of this step. Despite this, on June 30 the Government registered a bill (№2173) providing for the abolition of the special regime.
Thus the Cabinet violated the coalition agreement and the Action Plan for the implementation of the Programme of the Cabinet of Ministers, which provide for the preservation of the current system of taxation of agrarians by January 1, 2018,” said Miroshnichenko.
He believes that abolition of the special regime threatens the strategic development of the agricultural sector. “The industry is a leader of the national economy. Every third dollar of the export revenue is earned by agrarians. The development of the agricultural sector secures the financial stability of the country, stimulates the revival of related industries,” he stressed.
“This year, the land rent increased by 25% because of the increase of its regulatory assessment. This figure will rise this year from 13.5 billion UAH to 16 billion UAH. The single tax of the 4th group increased by 21 times. And this is more than 2 billion hryvnias taken away from agrarians. All this is happening in the context of the devaluation of hryvnia by three times and the non-refundable VAT on exports of grain. This approach is discriminatory in relation to other industries in terms of lack of real programs of state support of agriculture,” emphasized Ivan Miroshnichenko.
“The special regime of VAT is the only real mechanism to support the industry. It applies to all agricultural producers without exception. Its share in the cost of production ranges from 7 to 15%. Therefore, its cancelation will significantly increase the prime cost. Agrarians will lose 20 billion UAH of working capital and will be forced to take out additional loans, the volume of gross output in the agricultural sector will drop,” noted Ivan Miroshnichenko.