KYIV, July 27 – Leonid Kuchma has signed a law that imposes a moratorium on payment of value added tax by agricultural enterprises until the end of this year, the presidential press service announced.
The law stipulates, among other things, that value added tax levied on the sale of agricultural goods will not be paid into the state budget but retained by agricultural enterprises for use to acquire equipment and other material and technical resources.
Specialists with the presidential administration believe that the law will provide about Hr 500 million in financial assistance to agricultural enterprises, prompt support from investors, reduce the volume of barter operations, as well as the volume of goods sold outside the legal economy.
Parliament adopted the law on July 13.
The law amended the law On Value Added Tax, and will come into force on the date of publication.
Parliament’s Agriculture Committee asked deputies to establish a moratorium on VAT payment for agricultural enterprises until 2004.
Parliament’s Finance Committee and the government were categorically against the introduction of the moratorium.
On May 25, President Kuchma signed a decree that renewed VAT collection on agricultural enterprises for the sales of goods (work and services) of their own production.
Until then, VAT had not been collected from agricultural enterprises for two years.
The volume of VAT paid by farms is estimated at Hr 700 million each year.
