The Russians wanted to deny the reduced VAT on products

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Photo: Sergey Pyatakov / RIA Novosti

The Ministry of agriculture has proposed to abolish the preferential rate of value added tax (VAT) on products with milk fat substitute, increasing it from 10 to 18 per cent and subsequently to 20 in the case of the adoption of the bill. It is reported by RBC with reference to the agenda of the last Ministry meeting.

In the Department of food processing industries speaking on this initiative, believe that the increase in the tax rate in half would reduce the market share of products with substitutes of milk fat.

Manufacturers, in turn, warn that the measure would deprive consumers of cheap products. In addition, according to the Chairman of the National Union of milk producers Andrei Danilenko, she indirectly reduce the demand for raw milk, because the increase in VAT on all products would result in an overall reduction in demand.

Now VAT at the rate of 10 percent payable foodstuffs (vegetables, cereals, milk, bread, meat, fish, etc.), goods for children, books, textbooks and medicines.

Prime Minister Dmitry Medvedev announced an increase in VAT from 18 to 20 per cent on 14 June. The decision should enter into force on 1 January 2019. Then it became known to gradually raise the retirement age to 65 years for men and 63 in women.

The experts of the Institute of actual Economics has previously estimated the economic effect of increasing the tax rate. According to their estimates, on average, every Russian will lose about 4220 rubles a year. In addition, this measure could cause the Russian economy real damage as well as slow down the implementation of the may decrees of the President.

Video, photo All from Russia.

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