VAT hike on feed prices: It will affect final product prices
The tax regulation on animal feed, the largest cost item in livestock farming, has changed. With the communiqué published in the Official Gazette, the VAT exemption on feed additives and flake products has been removed. These products will now be subject to a 20 percent VAT.
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With the amendment made to the General Communiqué on Value Added Tax prepared by the Ministry of Treasury and Finance, the delivery of premixes and flakes, which are not fed directly to animals but are vital in feed production, has been removed from the scope of the exemption.
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According to the communiqué, these products will no longer be considered "compound feed" on their own and will be subject to the full tax rate.
FEED INDUSTRIALISTS WARNED: PRICES WILL INCREASE
Agricultural writer Ali Ekber Yıldırım announced that with the regulation, there will be a 3 percent VAT hike on feed prices. Citing the statement by the Turkish Feed Industrialists' Association, Yıldırım stated that this tax regulation will bring an average additional burden of 3 percent to feed costs.
According to what Yıldırım conveyed, industry representatives are making the following warnings in particular:
Additional Cost: The 20 percent VAT application will be reflected as a price hike on final products.
Critical Sectors: Since the use of premixes is intensive in egg and poultry feed production, price increases in these items are expected to be above the average.