Friday, 22 August, 2014

Today we found this interesting article from Eurasianet on how Kyrgyzstan if joining a unified tax coalition agreement with Russia, that should see a rise in import tariffs during 2014. The countries government see the move as key to revitalizing an economy dependent on re-exporting cheap Chinese goods. Public discontent, however, is reported as being likely.

“Kyrgyzstan is expected to join the Russia-led Customs Union by the year’s end. On August 11, Russian Foreign Minister Sergey Lavrov pledged $500 million in aid to ease Kyrgyzstan’s transition, without providing details. Membership requires Bishkek to raise import taxes to comply with the union’s common external tariffs. The Customs Union currently includes Russia, Belarus and Kazakhstan and is due to become the Eurasian Economic Union on January 1.
According to a draft government resolution posted on the Economics Ministry’s website in late July, the tax on imported cars (used and new) would rise incrementally each year for the next five years. For example, for a 10-year-old car with a 2400-cc engine, the Kyrgyz tariff is currently $960. Under the new rules, the import tariff would rise to $1,200 this year, $2,400 next year, and $11,040 by 2019. If the government approves the resolution at a meeting early next month, the new taxes could take effect immediately, according to the Economics Ministry (Parliament is not needed to ratify the rules). Taxes are somewhat lower for newer, cleaner cars, which are more expensive to begin with.”