Arkady Ponomarev: zero VAT rate on import and turnover of agricultural products will free up significant amounts of working capital

Источник: The DairyNews
A zero VAT rate on the import and turnover of agricultural products will free up significant amounts of working capital. This point of view was expressed by the State Duma Deputy from Voronezh region, a member of the Duma Agrarian Committee Arkady Ponomarev, writes The DaryNews.

Deputies propose to extend the zero VAT rate on the import and sale of pedigree cattle and other biomaterials until December 31, 2025. The corresponding bill was submitted to the State Duma on October 16.

According to the current legislation, the tax benefit is applied from October 1, 2016 to December 31, 2020. After that, the VAT rate should be 20% or 10%, depending on the type of animal.

The authors of the initiative point to the multiplicative effect of the proposed extension of the measure. The zero tax frees up funds of agricultural producers for development, increases the volume and quality of products, says the explanatory note. Thanks to the expansion of agricultural production, additional jobs are created, and deductions to budgets of all levels are growing, argue the parliamentarians.

‘To complete Russian farms, about 50-68 thousand head of pedigree heifers of highly productive dairy breeds are imported to Russia every year. With an average price of 2.5 thousand euros per pregnant heifer, the tax for its purchase will be 227 euros. When buying one hundred cows, you will need to pay about 23 thousand euros or 2.1 million rubles at the current exchange rate of the Central Bank of the Russian Federation,’ reports Arkady Ponomarev, one of the authors of the bill, a member of the Duma Committee on agrarian issues.

Even if VAT is reimbursed from the budget, these are funds taken out of the turnover, insists the parliamentarian.

‘The funds will be returned to the company's account, as a rule, in 4-7 months. Loss of working capital for such a long period with the cyclical specifics of agricultural production is always a big risk. Especially in the conditions of currency fluctuations and the current pandemic,’ Arkady Ponomarev explains.

The parliamentarian believes that maintaining preferential VAT will free up significant amounts of working capital and increase the financial and economic stability of enterprises.

‘Business will not have to be distracted by attracting additional funds to replace the "frozen" accounts in the Treasury. Consequently, the production process will go without failures and delays, believes Arkady Ponomarev.

Last week, Interfax News Agency reported that the Russian government plans to support the initiative of parliamentarians. The tax benefit for the import and turnover of breeding material is planned to be extended until the end of 2022, despite the fact that the funds from its cancellation in the amount of 16.6 billion rubles were previously included in the draft budget revenues for 2021-2023, the media writes with reference to the draft recall of the Cabinet of Ministers.

Earlier, we reported that the draft bill on extending VAT benefits for the import and sale of pedigree cattle until the end of 2025 was submitted to the State Duma.

Read more at © DairyNews.ru   https://www.dairynews.ru/news/arkadiy-ponomarev-nulevaya-stavka-nds-na-vvoz-i-ob.html

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