The increase of VAT to 20% from January 1, 2019 and prevailing imported flowers may have a negative impact on the industry.
“World flower export annual growth amounts to 2-3%. In Russia, the volume of imported produce takes about 80% of the market share. With that in the neighboring Belarus, the annual data is approximating 22% and they are not constructing any new greenhouses”, noted the general director of JSC Mir Tsvetov (Republic of Mordovia), Aleksandr Boldyrev.
Among the issues, mentioned by the grower hindering the production of bigger volumes of flowers, there were gas, water and electricity costs growth within the last three years as well as the VAT increase to 20%.
“We ask to include the flower growers in the group subject to 10% taxation, otherwise the industry may suffer incredibly”, added Mr. Aleksandr Boldyrev within the round table on the topic “Legislative aspects of the development and the measures of governmental support in gardening and vegetable growing” at the State Duma.
The law on increase of VAT from 18% to 20% from January 01, 2019 has been adopted. With that, the VAT rate on socially significant products has remained at 10%. Some other categories of goods and services are exempt from VAT, i.e. diagnostics and treatment, kindergarten and school education etc.