Press-centre
Agriculture needs revision of tax rates - comments by Natalia Galkina, director of the department of financial consulting, Pro-Consulting company. UKRINFORM
"Given the many-sided nature of the agricultural sector, it would be much more effective to set a differentiated tax. Because agricultural sector includes different forms of management (individuals, private farms, farmers' cooperatives, large agricultural enterprises, agricultural holdings) and branches (plant growing, cattle breeding, food and processing industry), each of which has different economic indicators and, consequently, profits. Large companies that actively sell their products not only in the domestic market but also for export can afford themselves paying a seven-percent
tax. However, it may be rather uneasy for small and medium businesses, which operate in less profitable areas," the expert says.
With the huge potential of development of the domestic agriculture, revision of taxation can be a justified step, she said. Considering that in January-February 2013 the national budget deficit in Ukraine amounted to UAH 2.334 billion, the prospect of getting additional UAH 1.3 billion from introduction of the 7% tax could not be disregarded by the state.
Adjusting the tax system, Halkyna argues, is also predetermined by the fact that since 1998 (when the president issued Decree 1328 on the support of agricultural producers, which freed farmers from the payment of VAT to the budget) much has changed in the functioning of the agrarian sector, new forms of business have been created, and the ratio of purely agricultural production and other activities has changed.
In addition, under the cover of the label "farmer", those businesses that would have to fill the budget often enjoyed benefits and evaded taxes, the analyst summarized.
Here, in the conviction of Deputy Minister of Revenues and Duties Andriy Ihnatov, it is needed to review the contradictions and distortions in granting benefits to avoid a substitution of concepts. "To do so, it is necessary to divide the participants in the market of agricultural products, to determine the composition of benefits and their users, and to analyze the existing benefits in the context of the sectoral structure of rural economy," the official says.
According to him, namely the agricultural sector showed the highest efficiency of incentives. He also noted that precisely the benefits that will contribute to groundless enrichment and tax evasion should be reviewed, but it should also be guaranteed that fair benefits for farmers will remain.
According to the State Statistics Service, in the first three months of 2013, the volume of agricultural production amounted to 21.270 million UAH. Compared with the corresponding period of 2012, in January-March 2013, the sale of cattle and poultry grew by 7.4% (785.4 thousand tons), the production of milk rose by 1.2% (2.1 million tons) and eggs by 4.6% (4.5 billion pcs.).
