The state’s debt for value added tax (VAT) reimbursement to grain trader Prometey for part of last year and this year reaches hundreds of millions of hryvnias, with its reimbursement now being spotty and according to non-transparent criteria, Rafael Goroyan, owner of the grain trading holding Prometey, said.
“The state owes Prometey a big VAT refund for more than a year, since before the war. We are patiently waiting for the VAT refund, but our patience may come to an end. Now it is reimbursed in a pinpoint manner, according to unclear criteria, as in the times of Yanukovych (ex-President of Ukraine – IF), when the tax was “discounted,” suitcases were carried, etc. But Prometey Company has its own principles. We never gave any bribes for VAT refunds because it deprived us of competitiveness,” he told Interfax-Ukraine.
“They (tax authorities – IF) want to “negotiate” and we always quarrel – we do not want to “be friends and communicate” with anyone. We do not create an ‘intimate environment,’ so we have conflict all the time,” the head of Prometey stressed in an interview.
“Our principles are much more important than money. Thank God, Prometey is developing, employees’ salaries are being paid, but if we get dirty in the mud of corruption, we won’t be able to wash off,” he added.
According to him, an effective way of dealing with government agencies is to ask for help from the media and hold actions with the participation of Prometey employees and their families.
“If we had to say something loudly, we held large pickets near the tax inspection. When Poroshenko (ex-President of Ukraine Petro Poroshenko – IF) was in power, 3500 people from Prometey employees and their family members used to picket when Nasirov (former head of the State Fiscal Service of Ukraine Roman Nasirov – IF) was the chief tax collector. It was a whole revolution. In my opinion, a month after that he was kicked out and now he seems to be under investigation,” stressed the owner of the holding.
“When the average business gets angry en masse, everything ends badly. We shouldn’t see the situation when VAT is reimbursed to someone point by point, for some unknown good,” Goroyan concluded.
The grain trader stressed that the issue of actual VAT refund is not just a positive thing for the Ukrainian AIC companies but a necessary condition for their survival in the market.
As reported, the head of the specialized parliamentary committee of the Rada Daniil Getmantsev earlier said that the volume of VAT refund to business in November increased by 20% compared to October and amounted to 13.6 billion UAH, this year such volumes were achieved only in February.
VAT refunds were almost completely stopped after the full-scale invasion of Ukraine by the Russian Federation on February 24 this year. If it was 18.52 billion UAH in January and 12.07 billion UAH in February, in March – 0.82 billion UAH, and in April and May it was completely absent and resumed only in June, when 9.5 billion UAH were paid, in July it almost stopped again – 0.6 million UAH. However, in August the amount of payments was 9,4 billion UAH, in September – 1,6 billion UAH and in October – 10,9 billion UAH.
Prometey Group provides services in the storage, processing and logistics of crops. Before the Russian aggression the holding owned 33 elevators in the regions of Nikolaev, Kirovograd, Kiev, Khmelnytsky, Zaporozhye, Sumy, Odessa, Kherson and Dnepropetrovsk, during the war the holding purchased one more.
By the end of 2021, the group planned to receive $45 million EBITDA, while in 2020 this figure reached $32.6 million and in 2019 – $30.5 million.
The Cabinet of Ministers has exempted generators, transformers and other goods important for the heating season from VAT and import duties, Prime Minister Denys Shmygal said.
“Today the Cabinet of Ministers will approve a resolution, thanks to which important goods for the passage of this heating season will be exempt from payment of VAT and import duty,” Shmygal said at a government meeting on Tuesday.
These include gas generators, electric motors and generators, electric generating sets and rotating electrical converters, transformers, electric batteries, electric water heaters and heaters, and some other energy and heat supply goods.
“This is important to speed up repairs now, improve light and heat supply, meet public demand and reduce prices of related products,” he added.
GC “Prometey” (Nikolaev) did not receive a refund of value added tax (VAT) in January 2022, in total, the grain trading group was not paid fiscal compensation in the amount of UAH 112 million, the company said in a press release on Monday.
At the same time, she points out that the State Tax Service (STS) is conducting a selective VAT refund, and accuses it of delaying its return by conducting lengthy business audits.
“As reported by the tax authorities themselves, and according to business representatives, in parallel (with the lack of VAT refunds – IF), thorough checks were launched. Informally, the purpose of these audits is to delay refunds, since some enterprises did not receive payments for January and do not have information when this process is de facto launched,” the group of companies said.
The corresponding transition of the economy to manual mode leaves the transition to the “shadow” as the only option for companies to continue their activities, the grain trader emphasizes.
“It is not clear that the business is already receiving refunds, the losses of which are not comparable with the “war” costs of agro-exporters – a strategic direction for the Ukrainian economy. In particular, members of the Ukrainian Association of Furniture Manufacturers claim to receive compensation payments. on the brink of profitability, are still waiting in line to receive refunds,” the press release says.
The grain trader stressed that for Ukrainian agro-industrial companies the issue of the actual VAT refund is not just a positive event, but a necessary condition for survival in the market.
According to the company, due to the unstable situation in Nikolaev, all data on VAT refund payments to the exporter are in the jurisdiction of the tax Volyn region, which does not show any interest in resolving the issue of its reimbursement to Prometheus.
“The company is one of the few that has not closed that part of its business that is located in the Nikolaev region and is in close proximity to the front line. At the same time, more and more taxpayers in Nikolaev have already stopped or closed. Perhaps this is the reason, because behind the scenes, applicants for compensation are divided into categories, and front-line companies are clearly not favorites for fiscal authorities,” the grain trader stated.
“Of course, now the country’s priority is financing defense and security, but selective non-reimbursement of VAT is the transition of the economy to manual mode, and does the authorities leave with this practice only one alternative to agribusiness – transition to the shadow?”, – he added in a press release. .
GC “Prometheus” provides services for the storage, processing and logistics of grain and leguminous crops on the basis of 29 elevators in Mykolaiv, Kirovograd, Kyiv, Khmelnytsky, Zaporozhye, Sumy, Odessa, Kherson and Dnepropetrovsk regions.
At the end of 2021, the group of companies planned to receive $45 million in EBITDA, while in 2020 this figure reached $32.6 million, and in 2019 – $30.5 million.
On Monday, the Cabinet of Ministers registered in the Verkhovna Rada draft law No. 7418 amending the Tax Code and other laws on the return of all customs duties and VAT on imported goods, including cars.
According to the draft law registered in Parliament on the revision of certain tax benefits, it is proposed to abolish the customs-free import of cars.
The document also proposes to resume taxation, which was abolished by law No. 2142, for goods imported by single tax payers of the first or third group, since on average the budget loses about UAH 3 billion in import duties on this benefit per month, as well as for enterprises that do not pay import duties – budget losses here average UAH 0.5 billion in import duties.
As for the abolition of preferential auto imports, the government notes that over 119,000 cars were imported during the period of this rule, and budget losses amount to UAH 13 billion, according to the explanatory note to the bill. At the same time, there are not isolated cases of importing premium cars.
At the same time, the bill proposes to exempt those who acquire ownership of electric vehicles from paying the fee for compulsory state insurance.
As noted in the explanatory note, the amount of customs benefits for registered imports of phones amounted to UAH 270 million, clothing and footwear – over UAH 850 million.
The agricultural exporter Kernel-Trade and the company specializing in wholesale trade in metals and metal ores Polyus Trading topped the list of the largest recipients of budgetary value added tax (VAT) refunds in August with an indicator of over UAH 1 billion, according to data of the State Treasury Service.
According to them, Kernel-Trade received almost UAH 1.6 billion of VAT refunds last month, Polyus Trading – UAH 1.095 billion, while there is no information on the budgetary refund of this tax to these companies in July.
The top five largest recipients of budgetary VAT refunds in August were also two steel plants – Zaporizhstal – UAH 407 million (in July – UAH 282 million) and ArcelorMittal Kryvyi Rih – UAH 386 million (UAH 315 million), as well as the agricultural exporter ADM Ukraine – UAH 231 million (UAH 159 million), the State Treasury Service said.
The second top five in the list are opened by Poltava Mining and Processing Plant – UAH 182 million (UAH 187.3 million) and Pivdenny Mining and Processing Plant – UAH 170 million (there are no data on reimbursement in July).
The top ten are closed by Viterra Ukraine – UAH 163 million (UAH 194.7 million), Yeristovo Mining and Processing Plant that topped the July list – UAH 157 million (UAH 383 million), as well as AGT – UAH 144 million (UAH 306.2 million), according to the treasury data.
The third five largest recipients in August looked like this: Mykolaiv Alumina Plant – UAH 121 million (UAH 120 million), Nikopol Ferroalloy Plant – UAH 110 million (UAH 190.5 million), Optimusagro Trade – UAH 96 million (UAH 144 million), and Leoni Wiring Systems UA GMBH – UAH 94 million (UAH 200 million).
Two more companies received over UAH 90 million in VAT refunds in August: Nika-Agrotrade – UAH 91 million (UAH 143 million) and Mondelez Ukraine – UAH 90 million (UAH 45 million).
According to the State Treasury Service, in general, in August 2021, budgetary reimbursement decreased to UAH 10.78 billion compared to UAH 11.15 billion in July and UAH 11.99 billion in June.
Minister of Agrarian Policy and Food of Ukraine Roman Leshchenko proposes to reduce the VAT rate from 20% to 14% on all types of agricultural products in order to reduce the cost of socially significant food products, while the ban on exports of sunflower seeds is, in his opinion, an illegal measure.
“Responsible state policy in this case is systemic measures to reduce prices for all socially significant food products that are included in the food basket of the Ukrainian consumer. All over the world and, above all, in the EU, this is achieved by the introduction of a reduced VAT rate for such products. Our proposal is to establish a 14% VAT rate on all types of agricultural products without any exceptions,” the minister wrote on his Facebook page on Friday, April 23.
Leshchenko noted that the “Soviet” practices of administrative regulation, like the draft resolution banning exports of sunflower seeds from May 15 to September 30, 2021, published for discussion on the website of the Economy Ministry, have a negative effect in a market economy.
“The ban on sunflower exports is an illegal measure, because, according to the current legislation, the basis for its introduction is a violation of the market equilibrium. However, there is no sunflower deficit in Ukraine!” he wrote.
Leshchenko said that the export ban also creates the preconditions for a monopoly conspiracy – concerted anti-competitive actions that the state must fight against. “An attempt to reduce the cost of a separate product at the expense of Ukrainian farmers is a dangerous measure that not only threatens the development of the agricultural industry and does not solve the problem comprehensively, but can also lead to the fact that the state will be forced to compensate farmers for losses caused by such unreasonable decisions,” Leshchenko said.
