Government hopes that elimination of special VAT regime for agricultural sector will fill budget - expert

Mykhailo Sokolov, deputy head of the Ukrainian Agrarian Council said this at a working meeting, UKRINFORM correspondent report.

"By cancelling special VAT regime for agricultural sector it is expected to receive 17 billion USD of annual revenues from agriculture – this is about 400 billion UAH at current exchange rate. The draft Budget 2016 envisages 900 billion UAH of revenues. Obviously, the government aims to fill the budget at the expense of agricultural sector, however, such measures will only lead to further shadowing of the sector," Sokolov said .

In expert’s opinion, the increase in shadow sector in agriculture can be avoided by maintaining simplified taxation system.

"The elimination of the simplified taxation system will only transfer the grain trade in the shadow sector. None of the farmers will want to complicate his life with confusing taxation system, so it's better to leave it like it is, "- the expert shared his views.

Sokolov also believes that maintaining the existing taxation system and prudent administration of excises will allow to avoid losses for agriculture.

"If a tax is imposed on greenhouses, then they can be closed as they become unprofitable. Increasing the tax burden on producers of meat and milk will only lead to a greater reduction in livestock and volumes of milk production. If the excise is increased, the population just will not buy alcoholic beverages, and manufacturers will have no funds to pay taxes and duties"- warned the expert.

Instead, in his opinion, if the existing system of taxation for agriculture is maintained, it will allow the industry to function normally and maintain the level of revenues to the budget. And if the administration of excises is improved instead of increasing them – it will even increase revenue from the sale of alcohol, said Sokolov.

We would like to remind that, as reported by the Ministry of Economic Development, during the first half of 2015 the level of shadow in agriculture decreased by 3% and is the lowest among all types of economic activity in Ukraine.