Ukraine can decrease the VAT rate for agricultural producers to 7% – draft law

APK-Inform

The Verkhovna Rada of Ukraine registered a draft law #7420 "On amendments to the Tax Code of Ukraine relating to reduction of the value added tax rate for agricultural enterprises", which proposed to reduce the VAT rate to 7% for producers of agricultural goods, as opposed to the previous rate of 20%.

According to the explanatory note, since January 1, 2017, the authorities canceled the special regime of VAT taxation for agricultural enterprises, which provided accumulation of the VAT resources at the accounts of agricultural enterprises. According to authors of the draft law, moving of agricultural producers to the general system of taxation and the need to pay 20% VAT on the sale of agricultural products caused the corresponding increasing of food prices.

The proposed reduction of the VAT rate will ensure not only transparent 100% fulfillment of the budget in terms of incoming tax revenues, but also allow controlling the dynamics of GDP, informed the explanatory note.