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.
Abolishing the payment of value added tax (VAT) for domestic air transportation will create positive conditions for the development of domestic airlines and revitalize regional air traffic, Deputy Head of the President’s Office Kyrylo Tymoshenko has said.
“We have goals to abolish VAT on domestic air transportation. This is an important topic. After all, it will help the development of Ukrainian airlines – not only state ones, but also private ones,” he said during the “Ukraine 30. Infrastructure” forum.
According to the official, this year the creation of a state air carrier can be completed and Ukraine will receive an understandable state national air carrier that will be able to solve not only tourism issues, but also state issues.
At the same time, Tymoshenko recalled that in the spring of 2020, at the beginning of the COVID-19 pandemic, it was necessary to involve private airlines in the evacuation of Ukrainian citizens from other countries.
“All this will be decided by a large national air carrier, which, I hope, will become known to the whole world,” he said.
At the Wednesday meeting, the Cabinet of Ministers of Ukraine expanded the list of goods needed to combat coronavirus (COVID-19), the import and delivery of which to the customs territory are exempt from VAT, test systems and laboratory equipment.
According to the text of the decree, this is about test systems for ELISA testing and antigen testing.
In addition, the government has approved a decree that will simplify the procurement of medicines for the treatment of patients with COVID-19. In particular, the requirements of Cabinet of Ministers decree No.333 some issues of state regulation of prices for medicines and medical products will not apply to the purchase of medicines for the treatment of patients with COVID-19, which will increase the access of medical facilities to medicines.
The Cabinet of Ministers of Ukraine exempted imported vaccines from coronavirus disease from VAT.
The corresponding government decree, adopted at a meeting on Wednesday, includes a number of antibiotics and vaccines for the prevention of coronavirus disease (COVID-19) in the lists of drugs that are exempt from VAT, approved by Resolutions No. 224 and No. 225.
As Prime Minister Denys Shmyhal said at a government meeting, this decision will reduce the cost of imported vaccines for the prevention of COVID-19.
The Verkhovna Rada at first reading passed bill No. 3656 on amending the Tax Code of Ukraine with regard to the rate of value added tax on transactions for the supply of certain agricultural products that proposes to reduce the VAT rate from 20% to 14% for the agricultural sector. Some 233 MPs voted in favor of the draft law concerned.
The document provides for amending Paragraph 193.1 of Article 193 of the Tax Code of Ukraine by adding a new subparagraph ‘g’ and establishing 14% VAT on operations for supply to the customs territory and admission into the customs territory of Ukraine of agricultural products classified by the following foreign economic activity codes: 0102 (live bovine animals); 0103 (live swine); 0401 (regarding whole milk), 1001 (wheat), 1002 (rye), 1003 (barley), 1004 (oats), 1005 (corn), 1201 (soybeans), 1204 00 (linseed), 1205 (rapeseeds), 1206 00 (sunflower seeds), 1207 (other oil seeds and oleaginous fruits,), 1212 91 (sugar beet).
“First of all, such a reduction will reduce the tax burden on agricultural producers that in turn will reduce the cost of raw materials by the amount of VAT reduction exactly for processors of such products, whereas, in general, reducing the VAT rate on transactions for selling grains, oilseeds and whole milk will not lead to budget losses, since these goods are not sold to the final manufacturer that is actually VAT payer,” said Mykola Solsky, the head of the Ukrainian Parliamentary Committee on Agrarian Policy and Land Relations, at the presentation of the bill.
According to the explanatory note to the document, which refers to the analysis carried out by UCAB based on data from the USDA and market operators for certain types of oilseeds and grains (sunflower, rapeseed, corn), reducing the VAT rate from 20% to 14% will not lead to large-scale distortions in the structure of VAT receipts/losses for any of the stakeholders (state/enterprise).