Ukraine Introduces 5-10% Annual Surcharge On Imports

The Uriadovyi Kurier government newspaper has published the Cabinet of Ministers directive No. 119 of 16 February on the completion of consultations with international financial institutions on introduction of interim measures to stabilize the country’s balance of payments, the Interfax Ukraine news agency reports. Thus, the condition for introduction of 5-10% surcharge on imports in 2015 (excluding critical imports), which is stipulated in the law "On the Balance of Payments of Ukraine" that the parliament adopted at the government’s proposal in late 2014, has been fulfilled.

The import surcharge is being introduced for 12 months because of the sharp deterioration of the country’s balance of payments.

According to the document, an import surcharge of 10% is to be levied on food products; products, fats, and oils of animal and vegetable origin; alcoholic and non-alcoholic beverages; tobacco and tobacco substitutes; vinegar; live animals (groups 1-24 of the Ukrainian Foreign-Trade Commodity Classification). An import surcharge of 5% will be levies on all other goods, excluding "vital" goods, in which the parliament includes the majority of energy sources and some medications.

The parliament exempted electricity, non-irradiated fuel elements for nuclear power plants (cartridges), coal, coke, natural gas (in the normal and liquefied forms), crude oil, raw petroleum products, gasoline, and diesel fuel from the import surcharge.

This category also includes medical devices for dialysis and cancer treatment, pharmaceutical products and components for their production that ate not produced in Ukraine (in accordance with a lost approved by the Cabinet of Ministers). Free assistance to Ukraine from foreign governments and international organizations, as well as weapons purchased by the state are exempted from the import surcharge.

At the same time, any goods sent (imported) by citizens onto the territory of Ukraine and subject to taxation will be subject to a 10% import surcharge.

The law takes effect from the date of publication of the relevant decision of the Cabinet of Ministers.

According to data from the State Statistics Service, imports of goods into Ukraine reduced by 28.3% to USD 54.38 billion while exports fell by 13.5% to USD 53.91 billion in 2014, compared with 2013.