The last two months demonstrated the Ukrainian government’s intent to prevent VAT refund amount reduction after its significant decrease in August. However, government will need from six months to a year to gain the market’s confidence.
According to government’s representatives, as of October 26, the state VAT debt declined to 16 billion UAH.
Experts hope that the tendency towards debt reduction will become permanent in the government’s practice, and in the near future it will lead to a “zero” debt, which will then emerge perhaps for technical reasons only, but not following the need to solve economic problems in the country in “manual mode” at taxpayers’ expense.
The Finance Minister Alexander Danyliuk sees the following ways to pay off the debt: by means of budget payments, debt issuance, funds from special confiscation.
Unfortunately, debt security is a palliative solution of the problem, which relieves the burden on enterprises only partially, but does not provide liquidity, while funds from special confiscation are short-term resources with a certain risk in relation to “planned” revenue. Moreover, the Parliament has not adopted the law on special confiscation yet.
Nevertheless, it feels like the government strives to resolve the VAT refund problem. (UkrAgroConsult/Business World Magazine)
