Situation with excise taxes on fuel for farmers must be urgently resolved

The situation with the loss of competitiveness of Ukrainian farmers in foreign markets due to the increase in excise taxes on fuel must be urgently resolved, said Nina Yuzhanina, a member of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy.

She cited the appeal of the Ukrainian Agri Council to the Cabinet of Ministers, which calls on the government to immediately develop mechanisms to implement the provisions of the law adopted in September 2024 on amendments to the Tax Code of Ukraine on the Implementation of the provisions of the acts of the European Union on excise tax and to ensure a reduction in excise taxes on fuel for farmers.

Yuzhanina specified that this concerns diesel and liquefied gas, which are used for the production and storage of agricultural products. According to the adopted law, the excise tax rate on diesel in January 2025 increased by 54% compared to January last year, and the excise tax rate on liquefied gas increased by 332%. By 2028, excise tax rates on diesel and liquefied gas will increase by 236% and 480%, respectively, compared to 2024.

The excise tax on fuel is fully included in the cost of production, it cannot be reimbursed as VAT – as a result, the price of Ukrainian agricultural products on international markets is growing, which leads to a loss of competitiveness, the MP emphasized.

She expressed regret that during the voting of the law in the Verkhovna Rada, amendments to maintain reduced excise rates on fuel for the agricultural sector, the extractive industry and the population, which is allowed by EU Directive 96/2003, were not taken into account.

In addition, the law obliged the government to develop and submit to the Verkhovna Rada by December 1, 2024, a bill on establishing reduced excise rates for fuel used by agricultural producers.

"The Cabinet of Ministers ignored this obligation. The Ministry of Finance is traditionally against establishing reduced rates. It is necessary to urgently correct the situation before the leading Ukrainian export industry loses foreign markets," the MP summed up.