Russia will reduce the customs duties on foreign brand automobiles

Russia will reduce the customs duties on foreign brand automobiles


 

Izvestiya.- Russia will reduce the customs duties on car imports for the last time, within the framework of agreements with the World Trade Organisation.

The current rates of import duties for new and secondhand vehicles are 17% and 22% respectively. However, the rates will be reduced on the first of September, in accordance with the obligations, which were undertaken by Russia during the admission process to the WTO. As told by the Ministry of Economic Development to Izvestiya newspaper, the duties will go down to 15% for new vehicles and to 17% for secondhand automobiles. However, the reduction rate according to engine capacity per cubic cm will be minimal: on average by 5 cents (€) per cubic cm of engine volume for new cars and by 6 cents (€) per cubic cm of engine volume for used cars. The reduction will only cover cars, since the transition period for trucks in accordance with the obligations of Russia to the WTO has already ended in 2017. The duties on trucks are currently set in the range of 0-15%.

As one may remember, Russia has entered the WTO in 2012. WTO was established for the purpose of eliminating the excessive customs barriers between countries, aiming to contribute to the formation of competitive industries, replacing the inefficient ones. The same year, the safeguard customs barriers, which were introduced as a protection for domestic car manufacturers during the crisis in 2009, were lowered considerably for the first time, from 30% to 25% for new cars up to 7 years of age and from 35% to 25% for older vehicles. The duties have further been reduced in 2017 and 2018. At that time, the share of imports in car sales amounted to 48%, gradually going down to the current rate of below 15%.

Meanwhile, the reduction of customs duties on cars with internal combustion engines will not affect the electric vehicles. Despite the inclusion of electric vehicles in the priority areas for the promotion of the automotive industry, the government has no intention to support the imports of electric vehicles. However, the government is ready to subsidise a serial domestic production of such vehicles (currently none). As stated by the Ministry of Industry and Commerce, the customs duties on electric vehicles is currently at a minimum level, which stands at 15%.