Ukraine scraps import tax on arms mostly from West
Ukraine’s President Petro Poroshenko has signed a law abolishing import taxation on foreign defense-related products, mostly from Western countries, at a time when the country is struggling with economic difficulties.
The press service of the Ukrainian president made the announcement on Sunday, saying the amendments exempt value-added taxes on defense-related goods imported from most European countries, the US, Canada, Brazil, India and China.
The legislation excludes any potential possibility to purchase defense-related products from the what the government in Kyiv dubs as the “invader state” – an apparent reference to Russia – and from “Ukraine’s occupied territories.” In January, the Western-backed Kyiv parliament labeled Russia as an “aggressor state” over Moscow’s alleged involvement in the conflict in the country’s eastern regions. Russia categorically denies the allegation.
The decision comes at a time when Ukraine is struggling with financial problems. Last year, the country’s economy shrunk by 7.5 percent as inflation soared, making it the worst economic year for Ukraine in over seven decades.
Ukraine’s central bank has forecast that the country’s economy will continue to contract by up to five additional percentage points this year and the inflation is predicted to stand at 18 percent.
The country’s currency, hryvnia, also fell almost 50 percent against the US dollar in 2014. Data released last month showed the hryvnia plunged by another 40 percent in value this year.
A political crisis erupted in Ukraine in November 2013 when the country’s then President Viktor Yanukovych refrained from signing an Association Agreement with the European Union in favor of closer ties with Moscow. In February 2014, Yanukovych moved to Russia after the security situation in the country seriously deteriorated.
Ukraine’s mainly Russian-speaking regions in the east have witnessed deadly clashes between pro-Moscow forces and the Ukrainian army since Kyiv launched military operations in mid-April last year to silence pro-Russia protests there.
CAH/HJL/HRB