The Oil and Gas Association of Ukraine proposes not to increase the VAT rate, but to equalize excise taxes on different types of fuel.
From July 1, Ukraine will continue the 20% VAT on fuel. This is guaranteed to lead to higher prices at petrol stations and the rise of schemes with tax twists. The Naftogas Association of Ukraine proposes to equalize the excise rate at 180 euros/1000 liters for all motor fuels, and leave VAT at 7%, according to a press release from the profile association.
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This alternative, according to NAU representatives, will increase revenues to the state budget, prevent a significant increase in prices and prevent the growth of illegal methods in the fuel market.
A reduction in VAT on fuel from 20% to 7% at the beginning of 2022 is necessary to stabilize the market in the face of an all-out war. At the same time, it allowed the minimization of tax fraud in the form of “bundles”.
“With the return of VAT to 20% from July 1, it is expected that the financial attractiveness of bundles will increase, their total volume will increase significantly. The state administers the excise tax on fuel, unlike VAT, better,” association members believe.
According to A-95 Consulting Group, in the event of a refund of pre-war taxes, gasoline will increase in price by UAH 11.2 (from UAH 47.17 to UAH 58.35/l); diesel – by UAH 7.7 (from UAH 47.43 to 55.10/l); autogas – by 2.6 UAH/l (21.77 to 24.40 UAH/l).
“It is not difficult to assume that in order to save their own money, fuel consumers will massively switch to outright illegal immigrants, despite the dangers from fuel quality and the threat to health and life posed by illegals gas station,” NAU said.
As a result, the return of VAT can lead to disastrous consequences and nullify all the efforts made by the state to clarify the fuel market.
If excises are increased and VAT remains at 7%, the price of gasoline and diesel will remain almost unchanged, and the price of autogas will increase slightly, but will still remain at half the price of gasoline.
“Such a model will allow the state to receive a higher level of revenues to the national budget than it plans to receive by returning the full rates of excise and VAT,” NAU said.
Recall that wholesale batches of diesel fuel for the week decreased by 1.25 UAH/l. The price of gasoline A-95 sank by 1 UAH/l.
Source: korrespondent
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