Annulment of tax exemptions is precondition for repealing critical imported goods list - Ukrainian Economy Ministry

MOSCOW. June 24 (Interfax) - The legislation annulling tax exemptions on imported goods passed by the Ukrainian Verkhovna Rada, which is taking effect on July 1, 2022, is a precondition for repealing the list of critical imported goods, Ukrainian media reported with reference to the Economy Ministry's statement.

This step should increase monthly budget revenues by 3.5 billion hryvni, it said.

The National Bank of Ukraine (NBU) restricted foreign currency payments abroad since the start of the Russian special operation in Ukraine. At the same time, the NBU allowed such payments for imported goods included in the list of critical imports endorsed by the government. This list has been expanded 18 times since then and currently covers about 90% of all categories of goods imported to Ukraine, the ministry said.

"The enactment of the legislation provides preconditions for lifting restrictions on purchases of foreign currency and trans-border transfers for importing goods on the NBU's part. At the same time, amid martial law, we consider it reasonable to leave restrictions on purchases of foreign currency and trans-border transfers for importing services," the statement quotes NBU Governor Kyrylo Shevchenko as saying.

The reinstatement of customs duties and taxes on imported goods and services is an important step to re-enable the currency market to balance itself. In particular, this would reinvigorate the Ukrainian manufacturing sector and curb import growth, which puts pressure on Ukraine's currency market and international reserves, it said.