On 16 December, at the initiative of the Association of Water Users Organisations, a roundtable discussion "Key legislative barriers to the implementation of the WUC reform" was held in Kyiv to discuss important issues that impede the effective implementation of reforms in the field of water reclamation in Ukraine.

The event was aimed at finding ways to solve the main problem: the need to pay VAT when transferring state reclamation systems from budgetary institutions to water user organisations. This legislative barrier hinders the transfer of infrastructure, which delays the development of the industry.

The event was attended by representatives of the Association of Water Users' Organisations, the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, as well as representatives of the Ministry of Agrarian Policy, the Ministry of Finance, the State Agency for Land Reclamation, Fisheries and Food Programmes, the World Bank, the USAID Harvest Programme and the USAID Agriculture and Rural Development Programme (AGRO). This demonstrates the scale and importance of the topic discussed at the roundtable.

Implementing irrigation reform and increasing irrigated areas is a strategically important task for the country, as it will ensure the stable development of the agricultural sector, improve land fertility and, accordingly, increase the country's food security. This was emphasised by Oleksandr Haidu, Chairman of the relevant Verkhovna Rada Committee.

Back in 2022, the Law on Water Users' Organisations and Stimulation of Hydrotechnical Land Reclamation was adopted, which made it possible to transfer state reclamation systems to water user organisations. This would not only allow for more efficient management of these systems, but also attract investment for their modernisation. However, without changes in tax legislation, this reform remains unimplemented in practice.

Taras Vysotskyi, one of the active participants in the process, pointed out the critical situation: "At present, the only way to transfer property to the DEC is to pay VAT from the savings of budgetary institutions, but this way does not allow us to launch the reform. Over the past three years, we have been able to transfer only three reclamation systems. If we don't change our approach, it will take us decades to transfer all the systems where the WMCs have already been established, which will completely offset the entire effect of the reform." This is indeed a bitter reality that requires immediate changes at the legislative level.

Taras Kot also added an important aspect to the discussion, noting that for some systems, such as the Ingulets irrigation system, the largest in Ukraine, transfer to the UEC will not be possible at all due to its huge book value, which exceeds UAH 1.5 billion. "Accordingly, the amount to be paid before VAT will be UAH 300 million, and the State Agency of Ukraine for Land Reclamation Development will never have such savings. Therefore, it will be impossible to transfer this system without amending the Tax Code or allocating funds directly from the state budget to pay VAT," said Taras Kot. This issue highlights the critical need to reform tax legislation to ensure the real transfer of reclamation systems.

Danylo Hetmantsev, Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, agreed with the arguments of the roundtable participants and promised to initiate amendments to the Tax Code that would exempt from VAT the transfer of state reclamation systems to water user organisations. This step will be key to implementing the reform and ensuring its effectiveness.

Alla Stoyanova emphasises how important it is to implement the reform: "We are on the threshold of huge changes, and this moment must not be lost. Supporting irrigation reform is an investment in the future of our country. Not only agricultural productivity, but also the stability of food security for many years to come depends on whether we can properly transfer reclamation systems."

Thanks to this dialogue between the state, business and international partners, there is great hope that the reform will be implemented and Ukrainian farmers will be able to develop irrigated land, reaping not only economic benefits but also contributing to the sustainable development of the country as a whole.