Belarus to raise import duties on cars because of Iran’s Samand?

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Belarus’s Deputy Industry Minister Valyantsin Gurynovich on Wednesday said that Belarus was set to raise import duties on foreign-made cars. He would not elaborate on the exact figures but reassured that they would not be raised to Russia’s level.

The deputy minister did not mention even approximately when the increase in duties should be expected. Industry Ministry’s spokesman Aliaksandr Balshou told the European Radio for Belarus that the idea of raising the duties on imported cars had been ripening within the ministry for a long time. But he was surprised that Valyantsin Gurynovich had voiced the news as a confirmed fact.

Experts link this fresh return to the topic of raising the duties on imported vehicles with the problems at the Unison factory near Minsk which assembles Iranian cars “Samand”. In Belarus, the Iranian “racer horse” costs $12500, with demand being much lower than expected. Officials believe that low import duties contribute to the low domestic demand for the Iranian cars. They suggest that higher duties would lead to higher prices for imported cars, thus forcing Belarusians to opt for the locally-assembled Iranian vehicles.

Syargey Mikhaylau, the responsible editor with the Autobusiness newspaper, confirmed to the European Radio for Belarus that the government had long since wanted to raise the import duties on foreign-made cars. But he would not put the problems with Samand as a priority in this issue. In his view, the Belarusian authorities care about the replenishment of the budget in the first place.

“The government is faced with the super task of reducing the negative foreign trade balance at least next year. Since up to $1 billion are paid in import duties, they definitely have something to think about. By raising the duties, officials hope to reduce imports and increase budget revenues at the cost of customs clearance of vehicles at the same time,” Mikhaylau says.

In the view of the expert, even if the duties are raised, they will hardly reach the level of import duties in Russia. To equate them, Belarus will have to raise them by almost three times.

The European Radio for Belarus has learned that Belarus Industry Minister Anatol Rusetski and Iran Khodra CEO Manuchekhram Manteghi are currently in talks over the acquisition by the Iranian company of the state’s shares in exchange for equipment. In the view of Syargey Mikhaylau, the fact that the deputy industry minister made his statement about the increase of import duties is connected with the negotiations. With this statement, he wanted to strengthen his minister’s position at the talks. However, even if imported vehicles become more expensive, this will hardly make Samand more attractive to Belarusian consumers, in the view of Mikhaylau.

“There is simply no demand for Samand. Its performance does not match the offered cost,” he said.

It might seem logical to reduce the price of “Belarus-Iranian” cars rather than raise the import duties on foreign-made vehicles. Autobusiness’s expert believes that the Belarusian officials are simply not capable of making such a step. They are used to get out of trouble in a different way, e.g. by introducing tax benefits for domestic producers. If someone were to clear a new Samand at the customs, its cost would rise to $13550. Industry Ministry spokesman Aliaksandr Balyshau declined a comment on this topic and forwarded this reporter to Unison CEO Dzmitry Yagorau. Unfortunately, the latter was “busy in the meetings” throughout the whole day. Yet, his secretary admitted that the meetings began right after journalists started calling her boss since early in the morning.