The parliamentary group of the Communist Party has questioned the government on the changes imposed by the government on taxation of agricultural activities, including the end of the VAT exemption scheme, which "represent a veritable death sentence" for thousands of producers.
Recently, a delegation from the Communist Party met olive oil producers from Tavira who exposed "a real problem" resulting from the changes in taxation.
Small and medium-sized agricultural producers deliver olives to the mills for oil production and get paid in kind with a percentage of the oil produced, explained Communist MPs Joao Ramos, and Paulo Sá from the Algarve.
The new rules mean that when olive oil is given to the farmer in lieu of a cash payment, the olive oil mill owners must, according to the new rules, come up with a monetary value on an invoice for the service on which VAT is due.
Since the farmers receive a given percentage of the oil produced, which may or may not be sold later, the miller can not when handing over the oil to the farmer, devise a value for the service, "which, of course, means they can’t issue an invoice."
The situation described is not specific to the Algarve and its olive producers, "is it happening in all situations when agricultural products are supplied to processors which then transform raw materials into saleable products," said the Communist MPs who questioned the government, through the Ministries of Finance and Agriculture, on its willingness to eliminate the requirement for immediate billing, invoices and VAT in these cases.
If not, the Communists wonder how the government expects those businesses, that transform raw materials into saleable agricultural products, to accord with the law.
Comments
How is it that for years the UK Inland Revenue has accepted local exchange trading and similar paid in kind activities ?
If not because - amongst much else - we have a culture of tax paying, less of a power distance gap with our elite so laws are laws not suggestions and, in this example, much larger profit making agricultural units. Not subsistence farmers.