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Who Might Be Affected by the Tax on Old Cars in Ukraine

Yuzhanina’s Bills on reducing the cost of customs clearance have been adopted only in the first reading and are awaiting consideration as a whole. Meanwhile, more than 90 amendments have been made to them, sometimes diametrically opposed.

If some amendments propose to further reduce the excise tax, others, on the contrary, introduce new payments. For example, one of the deputies proposes even to introduce a tax on old cars.

The tax is proposed to apply to all cars older than 5 years. Considering that the average age of cars in Ukraine is 21.5 years, if the amendment is adopted, the overwhelming majority of Ukrainian motorists will have to pay.

They want to calculate the tax using the formula: base rate multiplied by age coefficient, engine displacement (in liters), and ecological coefficient. For gasoline cars, the base rate is 200 UAH, for diesel cars – 300.

Interestingly, the age coefficient will be calculated as the age of the car minus five years. So, for a six-year-old car it is 1, for a seven-year-old 2, and so on.

The eco-coefficient depends on the engine’s compliance with emission standards:

Euro-2 and below – coefficient 4;

Euro-3 – 3;

Euro-4 – 2;

Euro-5 – 1.5;

Euro-6 – 1.

Thus, even for a six-year-old Lanos 1.6 (Euro-3 standard) you will have to pay 960 UAH annually, and a 1.2-liter VAZ penny of 1980 will cost 31,680 UAH per year!

We sincerely hope that the deputies will reject such a strange amendment, as the rates of the new tax can hardly be called adequate.

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