Duties on imported vehicles have been reduced in Russia. The rates of import duties on new and second hand vehicles will be reduced in the Customs Union within the framework of Russia’s obligations to the WTO as of the 1st of September 2018, up to 17% and 22% respectively.
As written in Kommersant, the duties on imported vehicles will be reduced within the scope of Russia’s obligations to the WTO, taking effect in Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The rate for second hand vehicles (5-7 years old) will be 22%. In total, the rates of import duties have been reduced in 96 Trade Import and Export Classification products by 3 percentage points in average. The duties on new vehicles have already been pulled down from 23% to 20% in 2017. The rates are due to fall even further, to 15% in 2019.
It should be noted that the reduction in duties on imported vehicles is unofficially compensated by the collection of utilisation charge from each automobile in the automobile industry. Initially, the fee was only paid by importers, however, due to pressure from the WTO-member countries, the spectrum of the utilisation charge has been extended to Russian factories and production localised in Russia, from 2014 onwards. In the meantime, so-called industrial subsidies started to be paid to domestic manufacturers, as a de-facto compensation for utilisation fees. The devaluation of the ruble was given as the reason behind the 65% rise in utilisation fees in 2016 by the government, however, the sources in the industry saw the increase as a compensation for the next reduction in duties on imported vehicles. The utilisation fees have risen by 90% for certain cars since the 1st of April 2018, at an average rate of 15%.