Ukraine will introduce mandatory registration of food export companies to prevent abuses such as tax avoidance in exporting key agricultural goods, the government said on Wednesday.

Ukraine is one of the world’s leading food producers and exporters, but officials estimate that up to a third of goods for subsequent export are bought in cash and without paying the necessary taxes.

Another problem is the illegal concealment or delay of foreign currency proceeds on accounts outside Ukraine.

According to the new procedure, only companies registered in the State Agrarian Register are value-added taxpayers, have no tax debts or delays in the return of foreign currency proceeds, and may engage in exports.

“The purpose of the pilot project is to create conditions for preventing abuses and violations of the law during the export of goods,” the government said.

It said the move would also “ensure the protection of the rights of agricultural entities that carry out economic activities without violating the law.”

Ukraine, in dire need of money for the war against Russia, has previously tried to tighten controls on grain exports, and in August, the southern Ukrainian region of Odesa, which has ports on the Black Sea and Danube River, introduced an export control mechanism for grain.

The mechanism said that vessels could be loaded only after a preliminary analysis of the legality of the grain’s origin.

The government data showed that Ukraine’s grain exports in October had almost halved year-on-year to 2.15 million metric tonnes from 4.22 million.

Ukraine had exported 8.9 million tonnes of grain in the 2023/24 July-June season, down from 12.9 million in the same period in 2022/23.

Traders and farmers’ unions have said blocked Ukrainian Black Sea ports and Russian attacks on Ukrainian ports on the Danube River are the main reasons for lower exports.

Ukraine has traditionally shipped most of its exports through its Black Sea ports. 

(Reuters/NAN)