Customs Union may double import duties

Belarus proposes to double import duties on leather footwear for the countries of the Customs Union - up to 20% of the delivery cost. Legal imports provide up to 60% of footwear consumption in Russia, and new tariffs will lead to an increase in shadow turnover, sellers are concerned.

Belarus appealed to the Commission of the Customs Union (CCC) with a request to increase customs duties on leather shoes, said Natalya Demidova, director general of the National Shoe Union. The appeal was signed by the Deputy Minister of Foreign Affairs of Belarus Alexander Guryanov. Since 2009 of the year, the import of leather shoes to the member countries of the Union (Russia, Belarus and Kazakhstan) has been subject to a duty of 10% of the cost of delivery, but not less than 1,8 euros per pair. Now the Belarusian side offers to take from importers up to 20% of the cost of shoes, but not less than 2,7 euros per pair. The increased duty should protect the producers of the three countries, the authors of the appeal are sure. An increase is possible after January 1 of 2012: before this date, the Customs Union introduced a moratorium on amendments to tariffs.

According to Natalia Demidova, the CCC scheduled a meeting on the issue of increasing fees. CCC spokesman Sergei Tkachuk said that the next meeting will be held on October 18.

According to the National Shoe Union, the volume of the footwear market in Russia in 2010 amounted to 570 million pairs, of which 335,8 million pairs are official imports, 63,1 million pairs are domestic shoes, the rest is illegally brought products (approximately 30%). Thus, domestic production covers only 10% of the needs of Russians. The shoe industry in the country is developing slowly. The production of leather shoes in seven years - from 2003 to 2010 year - grew by only 13% (data from the Federal State Statistics Service provided by the National Shoe Union).

With the existing volumes of domestic production in Russia, an increase in the duty will lead to an increase in shadow imports, Ms. Demidova is sure. Even the current customs duty is "expensive", she believes, in addition to it, the importer also pays VAT (18%) and pays for customs clearance (about 1% more). The new duties by themselves will not contribute to the growth of production in Russia, agrees Alexander Bayer, CEO and co-owner of the Alba shoe chain. Shoes of Russian and Belarusian manufacturers are famous for their low quality, so retail chains prefer to carry analogues from China or Italy, the businessman explains. If the duty is raised to 20%, the retail price of leather shoes in Russian stores will grow by 40%, Mr. Bayer said. The newspaper "Kommersant" writes about this.