Information for fruit and vegetables business in CIS
The import of the exotic fruits to Ukraine may be increased as a result of the import taxes reduction
Agricultural Marketing Project (AMP) was informed that the draft law of Ukraine "About the changes to the custom tariff of Ukraine", under the authorship of Yuia Timoshenko, the Prime Minister, was introduced for the Verkhovna Rada consideration. This draft law, in particular, presupposes the significant decrease of import taxes on some exotic fruits.
The import tax decrease for the tropic fruits seems quite logically grounded, cause these fruits are not and can not be produced in Ukraine due to the climatic conditions of our country. So, it is not quite understandable what function these taxes perform; for some goods taxes exceed 300%. Such tax level results in the contraband supply to Ukraine of the larger part of these commodities. The development of the transparent fruit and vegetable market is slowed down in the country, that leads to the losses in the revenue side of the budget and of the consumers who are forced to pay higher price for these fruits.
It is suggested in the draft law, in particular, to reduce the import tax on bananas from 6 to 3%, on avocado - from 0.2 EUR/kg (equal to 35-60%) to 4%, on oranges, tangerines, grapefruits and lemons from 20 to 3%, on table grape from 0.3-0.6 EUR/kg (equal to 25-60%) to 10%. Income tax for kiwi that was 0.6-1.2 EUR/kg (equal to 90-300%) is suggested to cancel at all.
To the opinion of the AMP analysts, the tax decrease on exotic fruits may lead to the great growth of the legal import and the increase of consumption rate of these commodities on the inner market; the level of the retail prices on the imported fruits may also go down a little.
It will also create the assumptions for the more dynamic development of fruit and vegetable wholesale trade in Ukraine and have the positive impact on the incomes of the farmers -producers of fruit and vegetable commodities.