The Ministry of Finance has issued a letter disagreeing with the extension of a favorable tax regime for agricultural producers. The tax and tariffs department is against the income tax exemption lasting until 1 January 2017, as was previously proposed by the industry lobbyists.
We note the continued controversy on the tax extension topic. Currently, agricultural companies are exempted from the income tax and lobby the practice to remain until 1 January 2017 as an additional support measure upon WTO accession. Although it could be critical to support domestic agricultural players, the government has not made any official announcements on the continuation of tax breaks. As a base case, we assume profit tax increase to 18% in 2013F, fully in line with the adopted schedule and recently stated view of MinFin.