On November 21, the Ukrainian Parliament passed a draft bill that will change the taxation rules for grain exports and may introduce minimum export price regulations, aiming to minimize tax evasion in agricultural exports.
The Union of Ukrainian Traders (UGA) said on Thursday that parliament's plan to change grain trade rules was ill-conceived and could lead to a complete halt of Ukraine's main grain exports.
The UGA statement said that Ukraine's grain exports may stop completely because of poorly considered changes in parliamentary regulations on grain and oilseed exports, resulting in conflicting regulations, including tax legislation. Some of the new requirements cannot be met, while others could cause significant losses to traders and farmers.
For example, the new regulations require that the minimum export price shall not be lower than the average quotation on international exchanges in the previous 10 days. UGA believes this request is unenforceable. The minimum export price set under this mechanism will exceed the actual price on the world market. UGA stated that Ukrainian prices follow global prices rather than deciding on their own.
Earlier this month, Ukraine introduced regulations mandating the registration of food export companies to prevent tax avoidance in the export of major agricultural products.
Ukraine is the world's leading producer and exporter of cereals. But officials estimate that more than a third of exports are purchased with cash without paying the necessary taxes.
