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October 31, 2011

 

American Chamber of Commerce in Ukraine appeals to veto law on VAT refund

 

 

The American Chamber of Commerce in Ukraine appealed to the country's president, with the request to veto the law on amendments to the Tax Codex, as the renewable refund of the VAT to grain exporters involves discrimination of separate market participants.

 

According to the announcement, the amendment does not assist to the average agrarian. Agricultural producers take advantage of the market with a high level of competition, where traders compete for purchasing of agricultural products and offer more profitable prices. But the present market has the conditions with domination of one or two traders, who have a privileged status at the expense of guaranteed VAT refunds.

 

The purpose of the new amendment is to create non transparent benefits for individual market players. Such unequal conditions of competition on the grain market will lead to lowering of prices for agrarians, the organization believes.

 

Besides, the Chamber of Commerce indicates that resumption of the VAT refund on grain exports would lead to additional costs of the state budget at the level of US$5 billion per year.

 

The Chamber of Commerce also notes that the VAT refund will assist to increasing of the level of competition and fraud during the administration of VAT, instantaneous reduction of export volumes of grains from Ukraine at least until January 1, 2012 (date of entry into force of the law), which will result in reduction of foreign exchange inflows and rising of trade balance deficit.

 

As a reminder, on October 20 the Verkhovna Rada approved as a whole the draft law #8521 "On amendments to the Tax Codex of Ukraine and some other legislative acts of Ukraine (on the simplified system of taxation, accounting and reporting of small business entities)". The draft law also includes the article on renewal of the VAT refund to exporters of grains.

 

The structure of the American Chamber of Commerce in Ukraine consists of the leading international and domestic companies from over 50 countries around the world, which are working in different sectors of the economy of Ukraine. Among them - suppliers of agro industrial technical equipment, farmers, agricultural traders, workers of food processing industry and organisations, engaged in financing of agricultural business.

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