The draft tax reform presented by the Ministry of Finance will bring the most harm to the agricultural sector. This was stated by MP, a member of the “Samopomich” Union faction, a member of the Committee on Agrarian Policy, Ivan Miroshnichenko.
“The proposed changes to the Tax Code are a real requisitioning. The government has come to those from whom something still can be taken away,” said the MP.
“If these amendments are adopted, the agricultural sector will fall by 10-12% in 2016. We shall expect a huge decline in livestock (15%) and crop farming (5-7%). The Ministry of Finance has designed a “fiscal” budget that places a burden on the agricultural sector. This is unfair and dishonest, since it is the agricultural sector that has been supporting the economy: it is supporting the balance of trade, the rate of employment! Agriculture is the only area of the economy which has shown a significant progress over the last 25 years, it has generated tens of billions hryvnias of real investments,” he stressed.
The reason for decline of agriculture may be a shift of the agricultural sector to the general tax regime which will increase the financial burden and make a part of the business go into the shadows.
Another problematic issue is the abolition of VAT. “This is a blow to the economy as a whole, because the producers have reinvested the money. How will the sector compete in an environment where European farmers are subsidized at a rate of 523 euros per 1 ha, and Ukrainian ones – up to 40 euros?” he stressed.
The MP also criticized the government’s negotiations with international financial donors.
“There is no doubt the negotiations with the donors need to be relaunched. We cannot be receiving $18 billion on the same terms over four years – while the country is at war, and the economy is seriously ill. We need more investments into the economy, not into the reserves, or for covering the budget deficit. The real sector of the economy needs $60-80 billion investments,” he explained. “Of course, investors question the issue of corruption. There is a solution: let creditors and persons authorized by them join supervisory boards and credit committees of the projects that use their money.”