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Head of presidential faction: Ukraine to have talks with EU on raising import taxes

December 28, 2014, 23:03 UTC+3 KIEV

“We are interested in having non-zero trade with Russia,” Yuri Lutsenko, the leader of the Pyotr Poroshenko Bloc faction said

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KIEV, December 28. /TASS/. Ukraine will have negotiations with the European Union on raising import taxes to recover its balance of payments, Yuri Lutsenko, the leader of the Pyotr Poroshenko Bloc faction, told a briefing on Sunday.

“Import taxes will be imposed after the cabinet of ministers publishes a positive opinion of European partners on that matter,” he said. “If the European community allows us to temporarily violate the free trade regime to rebuild our balance of payments, we will do it. Import taxes are not a mere way to replenish the budget, they are a tool to recover our balance of payments. We are interested in currency not just in revenues.”

“We /Ukraine/ are interested in having non-zero trade with Russia,” he said.

On December 25, Ukraine’s Verkhovna Rada /parliament/, on the third try, passed in the first reading the government bill on measures to stabilize Ukraine’s balance of payments in line with article 12 of the General Agreement on Tariffs and Trade of 1994. According to Finance Minister Natalie Jaresko, but for this bill, the 2015 budget revenues will be short of 17.6 billion hryvnias /more than one billion U.S. dollars/.

“Additional import tax will be levied on goods imported to Ukraine regardless of the country of origin of these goods and regardless of Ukraine’s agreements /treaties/ on free trade,” the document says. The tax will be applicable to all goods, except vital goods that include, according to the bill, natural gas, cola, fuel for nuclear power plants, oil, oil products /gasoline, diesel fuel/, banknotes and banking metals, and humanitarian aid.

Shortly after the voting, the European Business Association said the Rada was to agree this document with the European Union. According to the Association, such tax might trigger the growth of consumer prices, pose risks to importers, worsen business climate and send negative signals to investors.

The Association said the bills passed by the Ukrainian parliament ran counter to the General Agreement on Tariffs and Trade /GATT/ and rules of the World Trade Organization /WTO/ and violated international agreements. The Association warned that Ukraine’s unilateral move might be fraught with the cancellation of the duty-free regime the European Union granted to Ukrainian goods.

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