Export regulation: The American Chamber of Commerce did not support the new bills

The American Chamber of Commerce (ACC) believes that bills No. 10168-2 and No. 10169-2 create significant corruption risks and potentially block the export flow of agricultural products from Ukraine.

Recently, in the first reading, the Verkhovna Rada adopted draft laws No. 10168-2 and No. 10169-2.

“Companies-members of the Chamber are concerned about the specified projects of legislative initiatives, which create real risks for conscientious exporters, putting them in difficult and unfavorable conditions,” the American Chamber of Commerce (ACC) notes.

The organization emphasized that the presence of a duly registered tax invoice is a sufficient basis for the exporter to attribute the paid VAT amounts to the tax credit in accordance with the current tax legislation.

“The same approach should be applied to export control: responsibility for illegal VAT cannot be transferred to exporters who purchased products in good faith and received the right to a VAT credit in a legal manner,” ACC believes.

In addition, the proposed introduction of an export duty as a parallel export regulation algorithm, which looks simpler and cheaper to administer, creates significant risks of the majority of exporters switching to this algorithm, which can significantly reduce domestic purchase prices and harm agricultural producers.

The draft laws actually limit VAT refunds by establishing a direct relationship between the fact that the exporter receives foreign exchange earnings and the possibility of VAT refunds in the reporting month.

The initiatives also suggest establishing minimum export prices in accordance with international stock market quotations, which never correspond to real prices on the Ukrainian market, in particular, in the Black Sea region.

“Such an approach, in the case of its implementation, will actually limit the export of agricultural products only to supplies with a price level that will be considered justified by the state, which can potentially force exporters to admit defaults to foreign buyers and, accordingly, lead to the interruption of exports from Ukraine,” is noted in ACC.

The organization concluded that it is necessary to significantly refine and adopt draft laws, taking into account the suggestions and comments of the Chamber’s experts.