The Verkhovna Rada adopted a bill to reduce the value added tax rate on raw materials in the agricultural sector, including grain, from 20% to 14%.

The corresponding bill No. 3656 was approved by the people's deputies in the second reading.

The justification for the need to cut the rate prepared by the deputies says that this will not lead to a large-scale reduction in tax revenues to the state budget, but will help increase the profitability of companies.

“Processing enterprises will be able to save 6% in purchasing costs due to lower tax obligations of the manufacturer,” the explanatory note says.

But "at the same time, incentives for optimizing tax obligations will disappear," the developers of the bill believe.

A reduced VAT rate has been introduced for cattle, pigs and sugar beets. The list also includes such grains as wheat, rye, barley, oats, corn. And also soybeans, flax seeds, rapeseeds, sunflower seeds, seeds and fruits of other oilseeds.

The changes may conflict with Ukraine's obligations to international lenders not to introduce tax preferences, and it is not yet clear how they will affect the 2021 budget, which was adopted earlier this week.

Source