The State Duma approved in the first reading the extension of zero VAT for pedigree cattle

Its authors were a group of deputies from all factions of the lower house of Parliament. According to it, it is planned to extend the term of zero taxation for five years, until January 31, 2025. The zero rate applies to the sale of pedigree cattle, pigs, goats, sheep, horses, poultry, as well as eggs, semen (male sperm) and female embryos in the Russian Federation. As explained in the document to the bill, this measure reduces the costs of agricultural producers, increases the productivity of agricultural animals and solves problems with import substitution. For example, now Russian breeders actively import live highly productive heifers, pedigree young animals and breeding material in poultry farming.

The Government supported the draft law, but proposed to introduce it only for two years. They note that in the medium term, the measure will increase the payback period for investment projects, reduce investment activity and competitiveness of animal products on the world market, and slow down the increase in milk production. All this can reduce the level of self-sufficiency of the Russian Federation with milk and dairy products.

Zero VAT on sales and its accrual on imports of pedigree cattle has been in effect since October 2016. Initially, it was planned to be introduced by the end of 2020, and since next year the tax, depending on the type of animal, was supposed to be 10 or 20 percent. The profit from the cancellation of this benefit is estimated at 16.6 billion rubles. Of these, 5.9 billion will be the income from the abolition of VAT on sales, and the remaining amount – for the import of pedigree cattle.

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