Legislators suggest introduction of zero VAT for milk suppliers

Source : 112 Ukraine

The bill was drafted by 19 legislators from different parliamentary factions.
13:59, 20 April 2018

Open source

A group of members of parliament suggested replacing the current VAT rate of 20% with a zero for supplies of milk and cream (uncondensed without sugar) in Ukraine, Interfax-Ukraine reports.

Related: MPs suggest introduction of fines for dishonest labeling of food products

A bill #8282 amending the Tax Code of Ukraine was registered by the parliament on 18 April. The bill was drafted by 19 legislators from different parliamentary factions.

According to the explanatory memo attached to the bill, a drop in the incomes of agricultural enterprises with a simultaneous rise in the tax burden on them would cause a fall in the quality of cattle, production, further decline in consumption and production of dairy goods.

The document suggests that at the end of the first quarter of 2018, the average market price for “extra” milk was UAH 9.56 per liter ($0.37, including VAT). The range of milk prices is between UAH 8.76 and 9.80 per liter. The price of premium milk varies between UAH 8 and 9.50 per liter, while first-class mile costs UAH 8.84 per liter on average.

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According to the authors of the bill, they expect it to be adopted, which would positively impact producers, would cut the difference in procurement milk prices among VAT-paying agricultural producers, representatives of small- and medium-sized enterprises and households, and relieve the financial burden on consumers.

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