ZAZ Wants To Retain Tax Privileges

Automotive manufacturer ZAZ appealed against an amendment in the 2005 state budget law calling for an end to the automotive industry’s taxation privileges. The law will be reviewed by the parliament tomorrow. ZAZ says that restoring 100% taxation before January 1, 2008, will make it impossible for the company to reach the output volumes and the equipment renewal requirements, called for by its investment program. The government offered to increase tariffs on automobile imports from 15% to 34.5% of their cost, and to cancel privileges for Ukrainian enterprises. Concorde Capital: Several of Ukraine’s automobile producers enjoy privileges, including ZAZ, the Kremenchug Automobile Assembly Plant and LuAZ. These companies have initiated large investment programs and set plans for significant output increases. Based on growing demand, ZAZ?s output grew by 81% to 125,965 automobiles in 2004. Plans for 2005 foresee a 15% output increase.