Exporters of raw materials appeal to the government because of the tax – media

Authorities plan to eliminate VAT refunds for commodity exporters, exporters say. This may cause a decline in metallurgy and the agricultural sector.

Ukraine’s recovery plan contains an initiative to eliminate VAT refunds for exporters of raw materials, which could lead to the decline of the country’s largest industry. This is stated in a letter from Ukrmetallurgprom and the Ukrainian Grain Association to the Co-Chairs of the National Council for the Restoration of Ukraine from the Consequences of War – Ruslan Stefanchuk, Denis Shmyhal and Andriy Yermak, Obozrevatel wrote.

The authors of the appeal recalled the details of the iron ore industry, which by nature is more processing than mining, so Ukrainian ore undergoes beneficiation – a very capital- and energy-intensive process which become goods of the Ukrainian air defense system and pellets. high added value.

“In addition, the specificity of the MMC of Ukraine is that most companies belong to the vertically integrated ore-metal system. And when the demand for metal products in the global market decreases, such companies can last precisely because in the export of iron ore products. And therefore the additional financial pressure on the export of raw materials is a loss of stability in an industry that is going through the most difficult times because of the war and, in the years to come , will require significant resources for recovery and development,” the letter said.

Due to this specificity of the industry, additional non-market restrictions, such as the elimination of VAT refunds, will not lead to an increase in the level of processing in Ukraine, but, on the contrary, will have critical consequences, the letter said. .

At the same time, in the agricultural sector, the elimination of VAT refunds will only increase the share of the “gray” market.

The business offers the authorities to stimulate the development of processing industries by improving access and building infrastructure (electricity, water supply, sewerage, gas networks, roads, railway lines , etc.) in potential locations for processing businesses, as well as to ensure the simplification of procedures for permits and licenses.

Another nuance is mentioned – the majority of goods can be defined as raw materials, because for each subsequent stage of processing the finished products of the previous one are raw materials.

“This leads to another uncertainty and ambiguous interpretation of the very concept. And secondly, VAT is a tax on end consumers in Ukraine, so VAT refunds to exporters are a primary state obligation, and not an export promotion tool,” metallurgists and farmers said.

Thus, the elimination of VAT refunds will only lead to critical consequences for the economy.

Earlier, the Ukrainian metallurgist turned to President Volodymyr Zelensky for help due to the biggest crisis in the history of the industry. Without state aid, Ukraine could lose its mining and metallurgical complex, which provides 33% of exports, 10% of GDP and half a million jobs.

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