Ukrainian Parliament plans to lower import duty

Ukrainian Parliament plans to lower import duty

Ukraine’s Supreme Rada plans to lower, and in some cases abolish, the import duty currently in place on some rolled metal products, ferro alloys, pipes, technology, lumber, electric motors, furniture and toys. 300 deputies voted in favor of Prime Minister Timoshenko’s proposal to introduce changes in Ukraine’s customs tariffs. Only 226 votes were needed for the measure to pass. The bill is designed to curb smuggling and to eliminate the excessive differentiation among the import duties applied to various goods. An explanatory section of the bill describes how the current customs tariffs are so prohibitive that many merchants deliberately understate or misclassify their imports in an effort to avoid excessive fees. The proposed weighted average rate of duty after revision will be 4.45%, as opposed to the previous 7.79%. Although the overall duties collected by the government will likely be lower, the losses will be compensated due to the expansion of tax base. The bill calls for the import duty of ferro-alloys to be decreased 20-53%, while that of flat and rolled bar stock should be eliminated. The bill also calls for a 40-100% reduction in the duty on pipe and wire.