‘Progressive step’ for Ukraine’s car industry

Eastern Europe – Ukraine’s revision of its tax code could positively impact the country’s entire automotive industry, the Kyiv Post has reported. Notable changes include cancellation of the utilisation fee for the future recycling of almost all vehicles imported into the country.

The recycling tax on both used and new vehicles was introduced last September, although car manufacturers which created vehicle disassembly facilities were exempted. The utilisation fee has varied from the equivalent of Euro 250 to Euro 3350, depending on the model and state of the vehicle.

The fee has been described as ‘an additional heavy burden’ on consumers and vehicle owners. Recent statistics have confirmed that primary registrations of used vehicles fell 87% year on year in the first three months of 2014.

Those behind the revision have called the tax ‘discriminative’ and ‘not in line with the requirement of the World Trade Organization’. Supporters add that the change is a ‘progressive step’ towards Ukraine’s harmonisation with European legislative standards.

Besides cancelling the recycling fee, the country’s parliament will also set aside more than Euro 61 million of this year’s budget to cover expenses of those companies that benefited from the tax funds.