The rate of value added tax (VAT) on livestock products, rye, oats, flax seeds and sugar beets, reduced from the beginning of the year to 14%, will be returned to the level of 20%.
An Interfax-Ukraine correspondent has reported that the Verkhovna Rada adopted bill No. 5425-d on Thursday with 309 supportive votes with the required minimum of 226 votes.
The 20% rate will again apply to products with tariff heading 0102 (live cattle), 0103 (live pigs), 0104 10 (live sheep), 0401 (in terms of whole milk), 1002 (rye), 1004 (oats), 1204 00 (flax seeds), 1207 (seeds and fruits of other oilseeds), and 1212 91 (sugar beet).
At the same time, with respect to other grains and oilseeds, the VAT rate remained 14%. In particular, these are goods with codes according to tariff heading 1001 (wheat and meslin), 1003 (barley), 1005 (corn), 1201 (soybeans), 1205 (rape seeds) and 1206 00 (sunflower seeds).
As the head of the specialized agrarian committee Mykola Solsky said earlier, the idea of lowering prices and reducing tax violations at a reduced rate of 14% did not work for livestock products. The adopted bill is aimed at promoting the stability of the price situation in the relevant commodity markets, as well as creating equal and fair conditions for VAT taxation for agricultural producers and enterprises of the processing industry.
The Ukrainian Restaurant Association welcomes bill No. 5590 on amendments to the Tax Code to reduce the value added tax rate for the restaurant industry and catering services from 20% to 7%.
According to the association, about 63% of the restaurateurs surveyed by it expect business development due to the VAT reduction, and 19% of respondents intend to reorganize into an LLC if such an amendment to the code is adopted.
“Catering establishments often use the individual entrepreneur system for selling food and the LLC system for selling alcohol. This creates a number of difficulties for the restaurateurs themselves – the impossibility of maintaining civilized transparent relations with banks in terms of obtaining loans, limiting cashless payments with retail chains, the complexity of administering the tax payment process,” President of the Ukrainian Restaurant Association Serhiy Trakhachev said.
“Today there is a huge demand from the industry itself for the transition to a civilized and transparent form of existence. But this request is limited by a significant tax burden, in particular the need to pay VAT at the standard level of 20%,” he said.
So, the adoption of the amendments will allow increasing working capital in the restaurant sector and save jobs. According to the association, due to the coronavirus pandemic and quarantine restrictions, the volume of the restaurant market in Ukraine in 2020 decreased by a third and amounted to UAH 14.1 billion, almost all market players reduced their revenue.
