| Trade Issue | ||
| Tax for imported cement returns in Russia - 21 Nov, 2008 | ||
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According to Mr Victor Kovshevny the President of Cement Suppliers and Consumers Association that 5% tax for imported cement in Russia cancelled for January to September from January 25th 2008 to October 25th 2008 returned on October 26th 2008. Mr. Kovshevny said that in August the Government decided to prolong the 0 % tax “but no resolution was signed and 5 % tax automatically returned. He said that cement importers think that 5 % tax return is not accidental and it will be even increased. He said that “Taking into account difficult situation in the market the Government will rather confirm 10% to 15 % tax than prolong 0 % tax.” In August Russian Government decided to prolong the tax for another year but related document has not been issued yet. Officials promise to return the tax. Traders are sure that due to the difficult economical situation in Russian cement industry the government will rather increase the tax to 10% to 15 %. 0 % tax aimed to decrease cement prices which soared by 70 % in 2007 and reached RUB 6,000 per tonnes at the peak of the season. The volume of imported cement in January to September of 2008 since the cancellation of the tax exceeded 6.5 million tonnes whereas in 2007 a little more than 1 million tonnes were imported. Gross of imported cement along with demand decrease caused by construction rates slowing led to cement prices drop. In last half year the price declined by more than 35 % and now it makes RUB 2,800 per tonnes to RUB 3,000 per tonne. Mr Ekaterina Scheglova Commercial Director of “Jug Zerno T said that several cement importers confirmed that they already received notices from regional customs offices about the tax. He said that “On November 14th 2008 we expect a ship with 3,000 tonnes of cement and all calculations were made according to customs notice.” He added that “Garant Cement” and “Lafarge Cement” expecting cargo from Turkey are also are ready to pay the tax. Mr Vladimir Murov CEO of “Garant Cement”said that “Foreign manufacturers have to decrease their ex works prices by the amount of the tax. And even if it is just RUB 100, at current prices in Russia they already work with minimal profitability.” According to his calculations the cost of cement manufacturing in Turkey makes about RUB 1,350 per tonnes, in Russian ports cement cost is about RUB 2,700 per tonnes. He said that at 10% to 15 % taxes many Western exporters can reduce their shipments to Russia. | ||
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