Lift of Import Duties on Cattle Will Stimulate the Recovery of the Industry

by Vlada Zhabrovets
Friday, October 1, 2021

The import duties on cattle are to be abolished to solve the issue of the decreased number of cattle in Ukraine

On September 27, the first deputy minister of MEDT of Ukraine Taras Vysotskyy held a videoconference meeting of the working group on the prompt resolution of issues related to taxation in the agricultural sector. Among the participants were representatives of the State tax service, the State food and consumer service, regional departments of agricultural development, as well as heads of the Livestock breeders' association.

Among the issues discussed were the reduction of the customs rate on the import of animals and the optimization of the VAT rate. In addition to this, the issues of import and export of animals, a decrease in export duties and an increase in meat production were raised.

According to the State statistics service, over the past 10 years, the number of livestock and small cattle and in Ukraine has decreased by 40%. Livestock decreased from 4.8 million heads. to 2.9 million heads, small cattle (sheep and goats) — from 1.8 million heads up to 1.1 million. It is stated in the report of the Ministry of agrarian policy and food that an effective way out of this situation is the abolition of import duties on livestock and small cattle. It is noted that for $0.05 of the unreceived duty, the state budget will receive $0.20 of taxes, including through the payment of VAT.

The calculation is as follows: 5.000 heads of cattle weighing 200 kg are imported into Ukraine, and it takes 260 days to fatten it up to 600 kg. The cost of keeping one animal is $3.20 per day or $815 in total. Taking into account all taxes from economic activities, income from animal meat to the state budget will amount to more than $537 per head. That is, 5.000 heads of cattle may bring the state budget up to $2.7 million.

In addition, Taras Vysotskyy noted that this issue had already been raised at the previous meeting of the agrarian committee.

“The Ministry of agrarian policy fully supports the vision of professional organizations of livestock breeders to solve the problem of developing animal husbandry, at the same time it contributes to the strengthening of food safety and an increase of revenues to the state budget up to 5 times. Therefore, we suggested bringing all the initiatives together within a few days in order to discuss them details at the next meeting of the committee and start developing an appropriate draft law,” said Taras Vysotskyy.

The solution of this issue requires making amendments to the customs tariff of Ukraine.

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