17:55 15.06.2015

Introduction of extra import duty triggers growth of smuggling – Fiscal Service

Ukraine's introduction of additional import duties of 5-10% has provoked an increase in smuggling across the Ukrainian border, Deputy Chairman of the State Fiscal Service Kostiantyn Likarchuk has told reporters.

"According to our information, a very significant increase in smuggling occurred due to the introduction of additional import duties of 5-10%," he said.

Likarchuk said the introduction of an additional tax burden pushed entrepreneurs towards using various tax evasion schemes when importing goods to the country. In particular, they began using the authorization to import goods for personal use with a weight of up to 50 kg, and costing up to EUR500 per person.

He said it is necessary to reduce the permissible norm for personal use, saying it could be set at EUR 300 of the value of goods.

In addition, Likarchuk said that the introduction of additional import duties also curtailed production and reduced customs duty payments in Ukraine. He cited the example of British American Tobacco Ukraine, which is revising the geography of export deliveries from its factory in Pryluky and has suspended export operations with Belarus, in connection with which customs duty payments in Chernihiv region fell.

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