Non-refunding of VAT to soybean exporters or economic impact of “Soybean amendments”

November 4, 2019

Exempting soybean and rapeseed exporters from VAT has a negative effect on the economy of $44.5-60.5 million per year. The implemented policy aimed to increase the processing of soybeans and rapeseed by Ukrainian plants. As a result, the processors received $ 26 million and the state budget gained $ 2-18 million. However, soybean farmers, mostly small and medium-sized, received $ 88.5 million in losses, far outweighing the benefits of processors and the state budget.

According to Trade+ and UaFoodTrade Project researchers, the main task of the state is not to support certain industries, but to create an environment where companies of any industry are able to develop, and markets reward successful and punish unsuccessful players without government involvement.

Read the full brief prepared by the Foreign Trade Research Center Trade + and UaFoodTrade Project.

The Center was established at the Kyiv School of Economics in the framework of the project “Promotion of a Supportive Framework for Trade in Ukraine”, that is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Government.