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Russia to scrap import duty on aircraft under 50 seats

Russia to scrap import duty on aircraft under 50 seats

Russia is to scrap its 20% import duty on all non-Russian built aircraft with fewer than 50 seats for a period of nine months, effective from 1 January 2009.

The decision was announced by trade minister Elvira Naibullina during a visit by prime minister Vladimir Putin to the Aviastar factory in Ulyanovsk on 9 September. The move comes a year after the Russian government slashed import duty from 20% to 10% for aircraft with fewer than 19 seats.

Russia´s trade ministry will formally present the measure to the government in October, and when approved it will take effect in the new year. The suspension of duties is likely to be extended if it proves beneficial to the country.

The international business aviation community has been lobbying hard for the duties to be dropped, calling the tax on aircraft and spare parts as both restrictive and counter-productive in a country where demand for Western-made business aircraft has reached unprecedented levels.

Business aviation has been growing at around 30% a year, and import duties have meant that virtually all the business aircraft used by Russian operators are registered in other countries including Aruba, Austria and Switzerland.

The suspension of import duties on small aircraft is likely to have little direct effect on the Russian aircraft manufacturing industry, which produces almost no business aircraft and is unlikely to do so in the near future.

/ Новости