The Ukrainian government will soon consider proposals developed by industrialists for the state support of domestic producers in Ukraine and the formation of the country’s own base of raw materials.
A respective order was issued by Prime Minister Volodymyr Groysman after talks with business associations of the light industry and the Ukrainian League of Industrialists and Entrepreneurs (ULIE) at a forum in Chernihiv. Currently, the Cabinet has recently put forth a motion at the request of the business community to introduce 36-month installment payment of import VAT on equipment that is not produced in Ukraine. This was reported by the ULIE. The light industry is one of the sectors that can most rapidly and effectively modernize and introduce innovations.
It now accounts for 1% of GDP, although there was a period when its share was 11-12% of GDP. Its potential is enormous, the country still possesses powerful production facilities, technology, industrial tradition, all this can be used for the noticeable recovery of the industry and related industrial sectors. “One can forget about the industrial development of Ukraine while producers are trying to find out where to get used equipment without going into huge debt and how to solve problems with connecting to the power grids and so on. We must immediately introduce a critical import mechanism, the minimum customs rate, simultaneously expanding exports. There will be no sustainable growth without a state program for industrial development in general and the light industry in particular,” ULIE President Anatoliy Kinakh has said.
Industrialists suggested that the government should consider that imports of equipment and components that are not produced in Ukraine could be exempt from VAT. They estimate this measure will greatly stimulate the industry, while the country’s economy may see a 6-8% GDP growth. Entrepreneurs see the lack of raw materials in Ukraine as a huge challenge. On the average, imported raw materials account for 70%, which lowers the competitiveness of domestic products because this increases costs. The government has decided to make efforts to develop the country’s own resource base. Manufacturers will also benefit from a reduction in the multiplier used to calculate tax rates on land of technical areas and buffer zones for industrial enterprises.
