Kazakhstan and Belarus airlines exempt from tax on imported aircrafts

Kazakhstan and Belarus airlines have been exempt from tax on imported aircrafts starting from January 2014. Whereas Russian airlines have not, Prime agency reports. Initially the discount (zero) duty for temporary import of 111 to 160 seat and over 219 seat aircrafts was adopted in the CU countries (Russia, Kazakhstan and Belarus) in 2010. It was applicable only for cases of temporary import of the said aircrafts from terms not exceeding 34 months. Last week deputy Prime-Ministers of Kazakhstan (Kairat Kelimbetov), Russia (Igor Shuvalov) and Belarus (Sergey Rumas) signed a new document providing a permanent exception from duties of 50 to 300 seats aircrafts imported by Kazakhstan and Belarus airlines. But the agreement does not grant a similar exemption for Russian airlines for some reason. The new agreement is going to replace the old one the temporary import when in comes into effect in 2014, but there is still chance for the Russian carriers that the old agreement will be prolonged for them or altered somehow. Because is this doesn't happen the Russian companies will have to pay the duties on all the new aircrafts they import. And the ones that they already have in their fleets will become subject to the 20-percent duty in five years. According the Russian market participants, the tax will make 38% (including VAT) of the planes' cost. This will put Russian airlines in a big disadvantage compared to the foreign ones. And the air fares may go 15-20 percent in the Russian airlines. The measure is supposedly called to help Russian produced aircrafts win a bigger share of the market. But produces of An-148, SSJ-100, Tu-204 and MC-21 are currently unable to meet the market's demand and replace the imported crafts with their own.