Some cars may be exempt from taxes in Ukraine
After an unsuccessful attempt to hold a tender and purchase pickup trucks for the Armed Forces, the Ministry of Defense initiated an appeal to a Verkhovna Rada committee to exempt imports of pickup trucks under MoD contracts at zero duty and VAT rates. This will make it possible to procure at the lowest prices and purchase a larger number of vehicles needed for defense.
The Ministry of Defense submitted a letter with a corresponding request to the Verkhovna Rada Committee on Taxation and Customs Policy. Then the head of the committee, Danylo Hetmantsev, submitted this request to the Ministry of Finance of Ukraine for approval, after which the Verkhovna Rada of Ukraine will have to vote for these changes.
If cars under the Defense Ministry contracts are exempt from customs duties and VAT, this will reduce their cost by 32% and allow us to purchase more cars. In addition, according to Dana Yarova, advisor to the Deputy Minister of Defense, this will make it possible to put volunteer foundations and car distributors on an equal footing. Before these changes, a volunteer who imports a car, upon submitting a letter from the military unit to which the car is going, clears it at a zero duty rate and without VAT, but the military unit is obliged to put the car on the balance sheet of the military unit. A distributor who imports the same car has to pay a 12% duty and 20% VAT, which increases the cost of the car (including the multiplier) by 35%. If the Verkhovna Rada supports changes to the taxation of contracts for the Defense Ministry, this difference will not exist.
In addition, the Defense Procurement Agency plans to hold auctions with a zero expected value rate. Not to give the market a guideline on how much money the Defense Ministry can spend on pickup trucks, but to let the market give its own weighted price.
So, now the Ministry of Finance and the Verkhovna Rada should support the changes to taxation.
