Russia‘s State Duma has approved in its second reading a draft law that reduces VAT on fruit and berries to 10%. In addition, the draft law doubles VAT on palm oil from 10% to 20%.
The VAT will be reduced on all types of fruit regardless their country of origin, RIA Novosti information agency reported. Initially, deputies intended to apply the measure to Russian producers only, but abandoned the idea following additional consultations. They are confident that the draft law will allow companies to boost current assets that could then be forwarded for expanding business and planting new gardens.
Increasing VAT on palm oil is necessary for receiving additional budget income, which could further go for supporting milk production, deputies say. According to preliminary estimates, the move could result in additional RUR 4.5-5 bln ($71.3-$79.2 mio) to the budget annually.