The customs duty on imported cars may increase in Ukraine

Ukraine is getting ready for a regular increase of customs duty on imported cars, writes Commersant Ukraine publication.

According to the conclusions of the Ministry of Economic Development, which was made under the special investigation, car import causes the substantial damages to Ukrainian car maker and therefore it is necessary to increase duties on import of the most popular models with engine volume from 1 to 2,2 liters by the end of spring.

The Main conclusions of the Ministry of Economic Development and Trade (MEDT) discuss the need to introduce a special duty on cars importation for three years regardless of the country of origin and export. In addition to the existing 10 percent customs duty it was proposed to charge 6, 46% of customs car value with an engine volume exceeding 1 liter but not more than 1, 5 liters and 15, 5% of vehicles with the engine volume of more than 1, 5 liters but not more than 2, 2 liters. Actually, this volume of engine is typical for 80% of all the cars in Ukraine.  

Еhe MEDT conclusions were provided under the special investigation of the Interdepartmental Commission on International Trade (ICIT), which began on the initiative of the Motor Vehicle Manufacturers Ukravtoprom association on June 30, 2011. The final decision should be made by the ICIT in the middle of the May and come into force after publication.

The ministry believes that the importation caused substantial damages for producers. Thus, in 2010 – in comparison with 2008 the native enterprises output decreased to 78, 9 %, sales – to 86, 35%, profit from operating activities to 89, 9%, the number of workers on the native enterprises declined by 51, 3%.

The import from Russia causes a special concern in the office. In MEDT’s address to the trade representatives of RF in Ukraine it is said about the proposal to hold consultation with Russian representatives in order to discuss the ministry conclusions, on April 19. According to the State Statistic Service due to last year figures more than 39 thousand of cars produced in Russia worth more than $ 310 million were imported to Ukraine.

Ukrainian manufacturers believe that the special duty introduction will protect the national market and enable them to develop rapidly. Importers believe that duties will not justify manufacturers’ expectations. The custom duties increasing will not lead to growth of Ukrainian car production, it will just return the ‘screwing the wheels’ practice back to the country, large joint composition of imported cars.

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