VAT to be levied again from grain imported to Azerbaijan
BAKU – Value added tax will be levied from grain and flour imported to Azerbaijan beginning on July 10, the government has said.
Imported wheat and flour will be subject to 18 percent VAT, according to the new decision.
The Cabinet of Ministers decided in December 2010 to lift VAT from foreign-made wheat and flour until August 2011, but has now reduced the term of the measure considering feedback from the ministries of economic development, finance, agriculture and emergencies.
The exemption had driven up imports of grain and flour. According to the State Customs Committee, in January-May imports of wheat increased 50 percent compared to the same period of last year and that of flour surged as well.
The government’s new decision, however, is expected to scale down the imports. Sabir Valiyev, an Agriculture Ministry official, said the decision aims to protect the interests of local grain producers and stimulate domestic production.
"Since subjecting grain delivered from abroad to VAT makes it more expensive, the demand for domestically produced grain will increase," Valiyev said.
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