Verkhovna Rada hikes import duties by 13 p.p.

Yesterday, Verkhovna Rada of Ukraine increased import duties by 13 p.p. for all items but critical imports; the list of critical imports is to be approved until the yearend. The measure will be effective during the next six months but the government may prolong it for another six months without parliament approval. The Head of the Committee on Taxation and Customs Policy, Serhiy Teryokhin, said that the law was adopted after proper consultations with the WTO and the IMF and also noted that the law is subject to cancellation by the WTO requirement. Andrii Parkhomenko: The law will enhance smoothing of Ukraine’s current account deficit in 2009. We forecast that next year C/A shortfall will make up 2.2% of GDP, down from 5.8% expected for 2008, due to decrease in demand for both consumption- and investment-related imports.