Russian producers of fruits and vegetables are asking the government to reduce value added tax by 8%, according to REN-TV. In theory, this should lead to cheaper goods on the shelves. However, greedy middlemen could profit from it, and the Ministry of Finance is reluctant to lose profits, even at the expense of Russian agriculture.
"Reducing the VAT to 10% would lead to lower prices on the shelf, lower shelf prices will result in an increase in consumer demand, that is, people will buy more apples," says the executive director of the National Union of Fruit and Vegetable Russian Mikhail Glushkov.
However, it’s somehow hard for consumers to believe in this "shower of apples’’ and even sellers slyly smile at the phrase "decline in wholesale purchase prices."
In the government, opinion was divided: relevant agencies in the Ministry of Agriculture are in favor of the amendments to the Tax Code, but it is opposed by the Ministry of Finance.
"Demand for this product group will not significantly increase, while tax revenues will decrease, and this will further increase our deficit of the Russian budget," says financial expert Anton Shabanov.
At the same time the government hopes to increase the production of apples and pears. By 2020, Russian companies should be able to provide 80% of domestic demand, but for this it is necessary to invest in new orchards.
Source: fruit-inform.com