Imported cars to rise in price 10%53
- 04.08.2014, 17:01
New rules of paying taxes for importers have taken force.
One of the clauses of the new decree “On certain issues of taxation, accounting, revaluation of assets and collecting rent payment” concerns the procedure of paying and refunding VAT. The new rules will be applied to the goods that are imported in Belarus in an unchanged form, first of all cars.
Importers had to pay VAT two times due to legislative nuances, but the second VAT was immediately returned on dealers’ accounts. This period has been extended to 90 days, Komsomolskaya Pravda v Belarusi writes.
“It means that importers have to give the state interest-free loans for a period of three months,” Siarhei Mikhnevich, the chair of board of the Belarusian Automobile Association, says. “This money will be frozen in fact. Dealers won’t be able to spend them on buying new cars.”
The expert thinks it can lead to a 10% price growth for new imported cars in Belarusian showrooms in autumn. VAT is paid every quarter, the next payment is scheduled for October.
“It will become even more difficult to compete with Russian showrooms,” Mikhnevich thinks. “It means some dealers will close their business, because it will be more profitable for end buyers to purchase a car in Russia or use the service of those using grey schemes.”
Let’s take a best-selling car in Belarus and look what makes up its prices. A Volkswagen Polo Sedan (Comfortline, a 1.6 litre petrol engine, manual transmission) costs $17,000. The price includes $3000 of VAT the importer paid the state. The dealer has to pay $3000 more, but this money will return to him only in three months. The car will cost $18,700 after the price increase.