Ukrainian farmers insist on special value-added tax regime

More than 1,000 farmers went on strike near the Ukrainian parliament`s building on October 4 demanding the adoption of bill No. 3851-1, which is designed to re-enact a special regime of value-added tax (VAT) paid by agricultural producers, according to an UNIAN correspondent.

The rally was attended by representatives of agricultural enterprises from across the country, as well as members of the Agrarian Party of Ukraine, chaired by Vitaliy Skotsyk. He stated similar campaigns were being held throughout the whole country.

The Ukrainian farmers went on strike for the eighth time since June 2015.

”I hope that today our voices will be heard. Our demands are very simple. We demand that the Verkhovna Rada consider bill No. 3851-1. This will bring more than UAH 20 billion in working capital back to the agricultural sector, allow producers to set up processing facilities and maintain affordable prices of food. A sharp rise in food prices is a major threat,” Skotsyk said.

He also noted that farmers demand that the draft state budget for 2017 should be amended in terms of the return of the VAT special regime and a simplified tax system for farmers, which was in effect in early 2015.

”We demand the return of the tax system, which has proven to be successful for 17 years, from 1998 to 2015. It is a unique anti-corruption tool that allowed the agricultural sector to prosper. Now it accounts for 41% of the economy and every second dollar [earned]. VAT was accumulated on special accounts and invested in agricultural processing. All was done automatically without officials` interference. These are not benefits. It is an investment tool amid the lack of state funds and foreign investment. This system guaranteed reasonable food prices, jobs and income. We do not demand benefits. We ask not to create obstacles,” Skotsyk stated.

As UNIAN reported earlier, latest amendments to the Tax Code were adopted in late December 2015. The Verkhovna Rada partly canceled the VAT special regime for farmers. Currently, farmers are required to pay a certain percentage of VAT accrued to the budget, subject to the type of activity conducted. The farmers` special tax treatment is planned to be completely scrapped from 2017, as agreed with the International Monetary Fund, Ukraine`s key lender.

Bill No. 3851-1 on amendments to the Tax Code of Ukraine concerning the protection of rights of payers of value added tax, including agricultural producers was tabled in parliament on February 4, 2016. It proposes that the VAT special regime should be extended until 2018. The bill also envisages the creation of a single public registry of applications for VAT refunds from the budget by order of submission by agri-businesses.

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