REUTERS
The document provides for a decline in the VAT rate from 20% to 14%.
Ukrainian President Volodymyr Zelensky has signed a bill into law to reduce the VAT rate for certain types of agricultural imports.
That's according to a statement by the press service of the President's Office, published on February 22.
The document provides for a decline in the VAT rate from 20% to 14% for transactions on supplies and imports into Ukraine of certain types of agricultural products, in particular: cattle, pigs, whole milk, wheat, rye, barley, oats, corn, soybeans, sugar beets, flax seeds, rapeseed, sunflower seeds, and other oilseeds.
"The law is designed to support agricultural production in Ukraine, attracting investment in the industry, and increasing competitiveness of the domestic agriculture sector," the press service said.
The implementation of the law will also reduce motivation of taxpayers to optimize VAT liabilities for transactions with relevant products, as well as cut budget losses and contribute to the de-shadowing of agricultural production.
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On December 17, 2020, the Verkhovna Rada, Ukraine's parliament, passed Bill No. 1115-IX to amend the Tax Code of Ukraine as regards the VAT rate on transactions for supplies of certain types of agricultural products. The draft law stipulated a 14% reduction in the VAT for such imports.
Ukraine's Finance Ministry and the State Tax Service spoke in favor of passing a draft law to reduce the VAT rate for farmers from 20% to 14%, since the move will affect shadow schemes in the agricultural sector and the so-called tax minimization schemes existing in agri-exports.
At the same time, an expert with the National Scientific Center "Institute of Agrarian Economics," Candidate of Economic Sciences Leonid Tulush says the reduction of the VAT rate on raw milk may trigger price rises on dairy products in Ukraine.