From August 1, the value added tax (VAT) rate of 20% on live cattle, raw milk materials and other agricultural raw materials was restored. Ministry of Agrarian Policy and Food of Ukraine supports the Association of Milk Producers on the need for a thorough reduction of the VAT rate to 14% throughout the food chain.
This was emphasized by the First Deputy Minister of Agrarian Policy and Food of Ukraine Taras Vysotskyi during the Agricultural Tax Headquarters on July 26.
«A transition period is needed to adapt business and the State Tax Service to the new tax requirements. We continue to support the initiative to reduce VAT on the entire chain for social support of consumers, «said Taras Vysotskyi.
Since 2016, the Association of Milk Producers has been advocating the need to reduce the tax burden on business and increase the availability of food products, especially dairy products, for ordinary Ukrainians.
To exercise the right to adequate food (approved by FAO in 2004) in the developed countries of the civilized world, or those on the way to such development, apply the practice of reducing the tax burden on end users — first of all on VAT. Reduce taxes on food, which are the main in the consumer basket. In particular, EU countries apply reduced (preferential) VAT rates on a number of goods of important social importance, which include dairy products: in Poland — 5%, Germany — 7%, France — 5.5%, the Netherlands — 6%, Italy — 10%.
Therefore, the Association of Milk Producers emphasizes the need to reduce the VAT rate on socially significant foods throughout the chain with distribution to the shelf. This step will make food more accessible to consumers and really ensure the right of citizens to adequate food.
AMP recommends that dairy farms continue to negotiate prices for raw milk materials without VAT. Let us remind you that this is a world practice, as the price including VAT does not reflect the real price dynamics in the market.