Ukraine will introduce mandatory registration of food export companies aimed at preventing abuses such as tax avoidance in the export of key agrarian goods, the government said on Wednesday.
Ukraine is one of the world’s leading food producers and exporters, but officials estimate that up to a third of goods for subsequent export are bought in cash and without paying the necessary taxes.
An additional problem is the illegal concealment or delay of foreign currency proceeds on accounts outside of Ukraine.
According to the new procedure, only companies that are registered in the State Agrarian Register, are value added tax payers, have no tax debts or delays in the return of foreign currency proceeds may engage in exports.
The purpose of the pilot project is to create conditions for preventing abuses and violations of the law during the export of goods,” the government said.
It said the move would also “ensure the protection of the rights of agricultural entities that carry out economic activities without violating the law.”
Ukraine, in dire need of money for the war against Russia, has previously tried to tighten controls on grain exports and in August, southern Ukrainian region of Odesa, which has ports on the Black Sea and Danube River, introduced export control mechanism for grain.
The mechanism said that vessels could be loaded only after a preliminary analysis of the legality of the grain’s origin.
The government data showed that Ukraine’s grain exports in October had almost halved year-on-year to 2.15 million metric tonnes from 4.22 million.
Ukraine had exported a total of 8.9 million tonnes of grain in the 2023/24 July-June season, down from 12.9 million in the same period in 2022/23.
Traders and farmers’ unions have said blocked Ukrainian Black Sea ports and Russian attacks on Ukrainian ports on the Danube River are the main reasons for lower exports.
Ukraine has traditionally shipped most of its exports through its Black Sea ports.