Liberal Democratic Party proposes allowing stores to distribute expired products in exchange for VAT abolition
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The LDPR faction has prepared a bill that will allow the abolition of the value added tax (VAT) on products and bottled water with an expiring shelf life if they are given to the population for free. Amendments are proposed to be made to the Tax Code of Russia. Reportedly “News”the initiative is supported by the largest Russian retailers and relevant committees of the State Duma.
The explanatory note to the bill indicates that the annual loss of food in Russia at the stage of retail trade and consumption is about a fifth of the volume of their production. “This phenomenon is caused by various factors – from natural and climatic and weather to human, expressed in violations of storage conditions,” the document specifies.
The authors of the initiative believe that in order to reduce the volume of loss of products, it is worth transferring such goods to the population free of charge. However, at the moment, this is unprofitable for retail chains, since they have the right not to pay VAT only on discarded products with an expired shelf life.
The deputies note that if products with an expiring shelf life that will be distributed to the population are excluded from the list of objects of taxation, the problem of processing and shortage of goods will be solved. At the same time, it is proposed to exclude children’s and diet food, as well as alcohol from the list of goods that can be transferred to the population.
According to Yaroslav Nilov, deputy chairman of the LDPR faction, one of the authors of the initiative, Russian retailers have long been offering just such a solution to the problem, because it will bring benefits to each of the parties. The press service of the Liberal Democratic Party told Izvestia that the bill had already been submitted to the government for review.
VAT is a value added tax, an indirect tax that is levied on the sale of most goods and services. The amount of payment is determined from the difference between the cost of the product and the price at which it is sold. The tax is paid by the producers of raw materials from which the goods will be made. The VAT is then paid by the manufacturing company when the product is sold to stores. Retailers make a payment when they sell the product in retail.
Learn more about VAT optimization in material “b”.
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