According to Ukrainian Association of Secondary Metals (UAVtormet), in 2010 Ukraine is expected to increase its scrap exports by 1.9% YoY to 0.9 million tons, adding that in 2011 the country exports may fall if the government cancels the value-added tax on scrap transactions.
On September 3rd the Cabinet of Ministers submitted a revised draft of the Tax Code, which contained a provision for the exemption of operations with ferrous scrap from VAT payment as of January 1st 2011.
Mr. Valentin Kulichenko, president of UAVtormet, said the temporary exemption of operations with scrap from the VAT was implemented also in 2007-2008 and during this period the market saw stable operations, although export volumes declined.
He said that “I consider that the motivation for scrap export, if there is no compensation, will fall. But the question is whether the domestic market would be able to absorb additional volumes of production.” (SteelOrbis)
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