Ukraine introduces prohibitive import tax on Russian cars

Russian is trying to slow down the Ukrainian race of car import taxes. The Russian Economy Ministry reacted negatively to Kiev's decision to introduce a 32-percent import tax on Russian cars with the engine volume from 1,000 to 1,500 cubic centimeters beginning August 1, 2002, for four months. As the Ministry stated, this decision contradicts the agreement on free trade signed by the two countries.

Russia believes that there are no economic reasons for this decision. No cars of this class are currently produced in Ukraine despite the existing programs for state support of the car industry. Introducing such limitations, Ukrainian authorities "penalize their own consumers" in the first place, as Russian cars are the basis of the Ukrainian 'car fleet', a source in the Ministry stressed. Russia exports about 70,000 cars to Ukraine per year, the average price of which is $3,000-3,500. The introduction of the tax will increase their price considerably, the Russian Economy Ministry pointed out.

As for the forces, which had lobbied the limitation of Russian car imports, Ukrainian experts name companies involved in VAZ cars assembling - the AvtoRus company in Kherson and the Lutsk Automobile Plant owned by the Ukrprominvest concern, Nezavisimaya Gazeta reported.

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