Date: 10 months ago   Category: taxes

Rada wants to adopt the law which will lead to new rise in price of goods


The new bill of an excise on gasoline won't solve a problem of non-payment of taxes, but will lead to rise in price of transportations, lawyers say. The bill "About Introduction of Amendments to the Tax Code of Ukraine about Improvement of Collecting an Excise Tax at Retail Trade in Oil Products" submitted for consideration of the Verkhovna Rada in case of its acceptance can lead to a chain of rise in price of all consumer goods, but won't solve a problem with evasion of taxes. Specialists of law firm of Prove Group have come to such conclusion, having analysed the text of the document. In this bill deputies suggest to specify that the excise tax is paid not only upon gasoline purchase by citizens for personal use, but also in case fuel is bought by the enterprises. "Such norm will lead to rise in price of production of the enterprises which buy gasoline for production needs, including for gas station of cars of the enterprise and implementation of transportations. The size of the paid excise will affect the cost of transportations that can lead to rise in price of other products", - the senior lawyer of Prove Group Anton Kaganets comments. The lawyer also specifies that the proposal of deputies, as well as the existing system of payment of an excise tax in general, contradicts the Directive of the EU Council 2008\118\EC of December 16 20008 years which establishes taxation conditions by excises. According to this document, retails of excise goods can't be assessed with an excise tax as it has to be paid only during production or import of such goods. At us it is necessary to pay an excise at sale of production to the final buyer. "At the moment at payment of an excise tax on retails there is a number of problems. For example, the tax is difficult in administration because often excise goods, including gasoline, sell without cash registers that gives the chance to businessmen to evade paying taxes. At the same time, as a rule, in the retail price of gasoline the 5% tax is already put. The end user pays it as a part of the goods price, but it completely isn't transferred into the budget. The situation is aggravated by the market of illicit and counterfeit products which are sold at lower price", - Kaganets adds. The new bill not only isn't capable to solve the specified defects, but also promises emergence of new problems, the lawyer specifies. According to him, in this situation cancellation of an excise tax which is paid at retail trade in excisable production would be the best decision. "To offset losses of the budget, it is possible to increase an excise tax on 1-2%, but only during the importing and production of oil products. It will lead to administration simplification, reduction of price of gasoline and suppression of the schemes allowing to evade from payment of a collected excise tax", - Kaganets summarized. Law company Prove Group (LCPG) - the law firm specializing in the tax and customs right (administrative and legal proceedings), protection of business interests at communication

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