KYIV. Aug 17 (Interfax-Ukraine) – The losses faced by the state as a result of shadow schemes in agriculture totals about UAH 20 billion, which exceeds the level of benefits agribusinesses received at the expense of VAT in 2014 standing at UAH 19.8 billion, according to a press release issued by the Ukrainian Agribusiness Club association (UAC).
The agency said that the government is not giving up its attempts to abolish VAT benefits for the agricultural sector.
“Now the issue of filling the budget to ensure the normal functioning of the state and fulfilling the requirements of international lenders is very acute. But instead of implementing the promised reforms, eliminating corruption and withdrawing the economy out of the shadows, the government is trying to cover the budget deficit by increasing tax burden on agriculture,” UAC agricultural markets expert Vitaliy Kordysh said.
According to him, the effect of abolishing VAT benefits could be reversed. It would lead to the reduction of GDP in the industry businesses retreating into the shadows. Currently, the share of agriculture in the shadows is lowest among all the sectors of the economy and stands at 15% with the national indicators being at a level of no less than 42%.
The association believes the main reason for tax shortage in the national budget is the shadow turnover of agricultural land, counterfeit seeds, plant protection agents and the shadow grain market. In addition, according to official statements, damage amounting to $200 million, or UAH 4.6 billion, was caused by the State Food and Grain Corporation via corruption schemes.
