The Russian Federation Ministry of Finance will submit a bill to the government designed to abolish VAT in diamond trade on the domestic market in late April or early May. Alexey Moiseev, Deputy Finance Minister told this to the mass media.
According to him, this bill has been approved by all pertinent authorities and currently is being discussed by general public. According to the deputy minister, the bill will be approved without any difficulties, since there is a direct order from Deputy Prime Minister Yury Trutnev to abolish VAT on rough diamonds.
Alexey Moiseev also said that since VAT is a quarterly levied tax, it is unlikely that its zero-rate version will be made operational before the third or fourth quarter of this year.
Under the terms of WTO accession, Russia abolished the customs duty for the export of natural diamonds at the rate of 6.5% starting from September 1, 2016, which triggered a rise in rough prices for Russian diamond manufacturers also bearing a financial burden associated with an 18-percent VAT usually refunded from the federal budget only in several months. This, according to industry experts, results in higher diamond-cutting costs, while the abolition of VAT will increase the solvency of Russian diamond manufacturers and raise the demand for rough diamonds inside the country.
Theodor Lisovoy, Rough&Polished, Moscow