Business news from Ukraine

UKRAINE TO EXPORT OVER 60 MLN TONNES OF GRAIN

Ukraine in the 2021/2022 marketing year (July-June) intends to export more than 60 million tonnes of grain crops, while ensuring the throughput capacity of seaports will become an important challenge in the issue of its logistics, the Ministry of Economy said on its website, citing deputy Minister of Economy, Trade Representative of Ukraine Taras Kachka on Friday.“Even ten years ago, the issue of the throughput capacity of Ukrainian seaports caused lively discussions, but over the past five years their capacity has increased – from 49.3 million tonnes in 2016 to 81.5 million tonnes in 2021. The sea transportation sector operates without delays, while we are observing the volatility of prices for rail transportation,” the Deputy Minister said at the Global Grain Conference 2021 in Switzerland.According to him, the strategy of the Ukrainian government is aimed at developing infrastructure in the logistics industry in order to attract investors to it.Kachka specified that Ukraine is implementing a number of measures within the framework of the Agreement with the World Trade Organization on trade facilitation, such as the introduction of a Single Window mechanism for international trade, the institution of an authorized economic operator, and a joint transit regime. This will allow Ukraine to enter the list of countries with the safest and most comfortable conditions for doing business.The Trade Representative of Ukraine recalled that growth of global demand for freight transportation amid the weakening of quarantine restrictions raised rates on them to multi-year highs and increased industry revenues, which allows investing in the latest technologies, digitalization, automation, etc.As reported, the Ukrainian Grain Association (UGA) in November estimated export of grains, legumes and oilseeds from Ukraine in 2021/2022 MY at 68 million tonnes with a harvest of 105 million tonnes, which exceeds the forecast made by the organization in July respectively, by 6 million tonnes (9.7%) and 5 million (5%) tonnes.

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UKRAINE SOWS EARLY SPRING GRAIN CROPS ON 723,500 HA

Ukraine as of March 21, 2019 sowed early spring grain and leguminous crops on 723,500 ha out of 2.3 million ha planned.
According to a posting on the website of the Agricultural Policy and Food Ministry, early crops are being sowed in 19 regions of Ukraine.
The ministry said that spring barley is sowed on 517,000 ha (33% of the target), wheat – on 44,000 ha (25%), peas – on 140,000 ha (40%) and millet – on 23,000 ha (12%).
Input of fertilizers for winter crops continues: it is completed on 6.6 million ha (88% of the target).
As reported, referring to the ministry, the gross grain harvest in Ukraine in 2018 amounted to about 70.1 million tonnes compared to 62 million tonnes in 2017.

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UKRAINIAN FISCAL SERVICE PROPOSES ANNULLING VAT FOR GRAIN CROPS

The State Fiscal Service of Ukraine plans to propose amendments to the Tax Code of Ukraine regarding the annulment of VAT on supplies of grain crops and oilseeds to the domestic and foreign markets. The authority said in a statement to the Ukroliyaprom association, a copy of which has been forwarded to Interfax-Ukraine, the fiscal service proposed abolishing taxation of transactions related to supplies of wheat, barley, soybeans, rapeseeds, sunflower seeds, soy, sunflower, rape and mustard oils on the customs area of the country and for exports.
The fiscal service said that during 2017 and the first half of 2018, companies exported these goods totaling more than UAH 500 billion.
“For 2017 and the first half of 2018, the amount of budget reimbursement of VAT only to the largest exporters of grain and oilseeds (1.4% of their total) was UAH 32.2 billion, or more than 2.2 times higher than the total VAT receipts from almost all economic entities, in the registration files of which one of the activities indicated the production of these products, as well as its sale,” the authority said.
The fiscal service assesses the negative effect of this at UAH 50 billion and indicates a high shadowing of the market in these segments. At the same time, the fiscal service recognizes that the tax administration of VAT in this area and the corresponding supervision and law enforcement measures are ineffective.
In turn, the agrarian associations expressed concern about this initiative, emphasizing that the abolition of VAT refunds could affect not only export, but also operations in the country itself.
“When selling products with VAT, a farmer sends the received funds from paying the tax to compensate to himself the VAT that he paid in the price to his counterparties for various materials: seeds, crop protection agents, fuel, electricity and fertilizers. The remainder is sent to the state. After the implementation of these initiatives, farmers will have to compensate for the VAT paid to their counterparties by increasing the cost of goods,” Deputy Head of the Ukrainian Agrarian Council Mykhailo Sokolov told Interfax-Ukraine.
“If these changes are made to the Tax Code of Ukraine, it will actually mean that UAH 50 billion of export VAT, which, after a long struggle, finally began to be returned in a timely and transparent manner and without corruption schemes, will be taken away from agricultural producers,” the Ukrainian Agribusiness Club’s press service reported, citing Director General of the association Taras Vysotsky.

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