March 18 2005, 14:12 APK-Inform

CM suggests changing the system of import taxes for agriproducts

On March 15 a governmental draft law about amendments into the customs tariff was submitted for consideration to parliament.

Explanatory note to the bill reads that the amendments have been prepared in execution of the order of Ukraine's PM Julia Timoshenko regarding combating smuggles of goods into Ukraine.

The authors of the bill state that the currently effective Customs Tariff of Ukraine stipulates specific rates of import duties for agricultural products, supplied to Ukraine, which are practically prohibitive (50 to 150 percent and over). Besides, most of the rates for the same groups of goods exist with significant differentiations. All of this leads to nearly complete impossibility of legal imports of the goods, evasions of economic subjects from payment the taxes and other distortions, which finally result in grave financial losses of Ukraine's state budget and local commodity producer.

In this respect, it is suggested significantly reducing preferential rates of import duties for agricultural goods, and to set the full rates at the level of currently existing preferential ones.

In particular, the Cabinet proposes to reduce the import duties for some oilseed crops: for sunflower seeds - to 15 percent (the current full rate for this commodity is 1 euro per kilo, the preferential rate - 0.5 euro per kilo), for mustard seeds - to 10 percent (currently - 0.3 and 0.6 euro per kilo accordingly). It is suggested setting the duties for rapeseeds and flax seeds at 5 percent.

The changes suggested into the sector of grain crops are as follows: the duty for hard wheat is proposed at 15 percent (the current full rate is 80 euros per kilo, preferential one - 40 euros per kilo), for rye - at 20 percent (currently - 40 and 20 euros per kilo accordingly), for barley - 10 percent (40 and 20 euros per kilo).

Besides, the Cabinet of Ministers suggests reducing import duties for meat (to charge the imports of beef and pork with 15-percent duty instead of currently existing full rate of 2 and preferential rate of 1 euro per kilo).

The changes into the rates of import duties are stipulated for nearly all the goods within Commodity Groups 1-24 acording to Ukrainian Foreign Trade Commodity List (foodstuffs and agricultural products), except for separate items (wines, alcohol, tobacco and a few others).

According to calculations of government's experts, after reviewing the rates, the arithmetical mean of import rates for the Commodity Groups 1-24 will be reduced from 19.69 to 10.54 percent.

According to press-service of Ukraine's Economy Minister Serhiy Teryokhin, reduction of the tariffs was preliminarily discussed with agriculture ministry, the Union of Importers and representatives of local agricultural producers. However, according to Teryokhin, it will be much more difficult to pass this bill in parliament than it was the case with the previous changes. He emphasised that the so called "protection of Ukrainian producer", which opponents of the bill would be using as their combative slogan, had already resulted in pretty bad consequences. According to his data, large volumes of agricultural products have been furtively imported to Ukraine through the loophole of free economic zones, thus evading from payments of customs fees.

"On this reason last year the state was underpaid about $620 million solely from such sort of imports of meat and variety meats", the minister said.