Duma Approves Car Disposal Tax

The State Duma, the lower chamber of the Russian parliament, has approved a utilization tax on new and used car vehicles on Friday, in a move which could increase Russian car prices.

Under the law, the government will impose a tax on any means of transport, imported or made in Russia, from August 2012. The precise figures have not been determined yet, but the basic rate for a new passenger car could be 20,000-45,000 rubles ($612-$1,375) and 150,000-400,000 rubles ($4,584-$12,225) for lorries and trucks, under forecasts by the Ministry for Industry and Trade and the Economic Development Ministry.

Duma member Alfiya Kogogina, one of the initiators of the approved law, said that the tax imposition would not lead to rising car prices.

“In some cases the tax could even lower car prices taking into account Russia’s accession to the World Trade Organization,” Kogogina added.

The number of cars affected may rise from about 1.5 million in 2013 to up to 2.5 million vehicles by 2015, an explanation note says.

“The fee will be imposed on new cars as well as used vehicles. Utilization obligations will be levied on car makers and importers, i.e. included in car price. Only in rare cases …, will the tax be paid by a customer,” Duma member Vladimir Gutenev said.

The exceptions apply to cars of refugees and displaced persons, diplomats and their families, rare cars made over 30 years ago, as well as to vehicles imported from Belarus and Kazakhstan and means of transport placed under customs procedures in the Kaliningrad special economic zone till April 2016.

Ford Russia as well as Russian auto makers AvtoVAZ and GAZ were unavailable for immediate comment for RIA Novosti.


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