The bill concerning VAT rate reduction up to 10% for fruit-and-berry production passed its first reading in State Duma.
The document was triggered by all party faction leaders with the Chairman of the State Duma Vyacheslav Volodin at the head. It was introduced on July 12, 2019. According to the TASS, the consideration of draft law in the first reading was held on July 18, 2019. The amendments, according to which the only local fruit-and-berry production will be subjected to the discounted VAT rate, will be supposed to the bill up to the second reading.
The law-in-draft is focused foremost on the local producers’ state support & on arrangement of conditions for successful imports phase-out. As the Speaker of the lower house of Parliament, Vyacheslav Volodin explained, after the meeting with the representatives of horticultural business the President of Russian Federation Vladimir Putin instructed to address the issue of VAT rate reduction from 20% up to 10% as one of the steps of local horticultural sector state support.
The document includes fruit & berries (grapes inc.) into the shortlist of the food products, to which the 10% VAT rate is applied. The Government of the Russian Federation will prepare the list of fruit-and-berry production for preferential taxation. The reduced VAT rate will not be applied on the importing fruit & berries.
According to the explanatory note, “The reduced VAT rate setting for the fruit-and-berry production sales will afford the local gardeners to increase the working capital & invest in the new gardens lay-out & technological support for horticultural & winegrowing production ramp-up. The VAT rate reduction levels the tax terms for gardeners with the producers of the other food sectors, such as meat, dairy products, vegetables, grain & sea foods, whom for the 10% VAT rate is now applied.”
According to the Federal State Statistics Service, the total fruit-and-berries output (grapes inc.) of Russian agricultural organizations & owner-operated farms (self-employed individual inc.) amounted 1077,5 thousand tons in 2018. While in 2018 the total apple, pear, apple-quince & plum import reached 1721,1 thousand tons (1121,7 thousand tons of apples inc.), as reported by the Federal Customs Service. This figures show the Russian market import dependence. The fact was marked in the explanatory note to the bill.
As one of the bill authors, the United Russia party faction leader Sergey Neverov explained, the bill will be passed as top-priority until the end of the spring parliamentary session.