Ukraine: cancellation of the VAT refund in the oilseed exports to cause some reduction of the planted areas – expert

Source

APK-Inform

2589

The decision of the Verkhovna Rada of Ukraine to cancel the VAT refund for the exports of sunflower seed, soybeans and rapeseed may cause some reduction of the planted areas under the reporting oilseeds in Ukraine because of the expected decline of profitability of the crops production, declared the Director of the export-oriented company APK Sodruzhestvo Ukraine, Alexei Guivan.

To date, it is difficult to forecast how far the VAT non-refund for oilseed exports can affect the prices, but it is clear that they are trying to reduce the domestic purchasing prices for raw materials. Also, the reporting situation will not cover oilseed by-products at all. First of all, the reporting law provides increasing of rapeseed and soybeans processing volumes, because Ukraine prefers processing sunflower seed rather than exporting the oilseed. According to A.Guivan, it is unfair competition because the officials removed VAT refund from certain crops only, without any discussion with crop producers who will face losses from those innovations. Therefore, the reporting law takes some share of money from the producer, taking into account all nuances of the VAT administration.

According to the expert, there are some doubts that the reporting situation would lead to increasing of the processing volumes of soybeans and rapeseed, as in Ukraine oilseeds is the major export-oriented product but not oilseed by-products. Of course, in the current season until February-March of 2018 the rates of oilseed exports will continue increasing, and companies-exporters will try supplying the major volumes of soybeans till the law comes into force, summed up A.Guivan.

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