The introduction of a phased indexation of the recycling fee for motor vehicles in Russia is expected from 1 October this year.
For reference: indexation is one method of preserving the real value of monetary claims and various incomes in inflationary conditions, whereby the state and other entities paying funds increase citizens' monetary incomes and savings in line with the rise in prices for consumer goods and services.
According to interfax.ru, for vehicles brought into the Russian Federation before this date, the current recycling fee rates will apply, provided documents are submitted to customs authorities by 1 November 2024.
It is reported that, according to the long-term plan for indexation of the recycling fee, it is planned to increase it by a one-off 70-85%, and thereafter to index it annually by 10-20% until 2030.
"The phased indexation of the recycling fee may affect passenger cars, light commercial vehicles, trucks, buses, trailers and semi-trailers, as well as certain types of road-building machinery," the Russian Ministry of Industry and Trade reported.
It is noted that changes regarding imports will not affect individuals who personally bring a vehicle into the Russian Federation with an engine capacity of up to 3 litres for personal use, provided they comply with the established rules for paying customs duties and taxes.
"Given the positive dynamics of domestic production, 2024 may become the first stage in implementing the long-term scale for automotive vehicles and trailers; the rate may be planned to be indexed by an average of 70-85% in the first year and by 10-20% each subsequent year. For construction and road-building machinery, the possibility of indexation from 2025 is being considered, with an annual rate increase of 15%," said a press release from the Ministry of Industry and Trade.
It has become known that indexation of the recycling fee is only being considered for that machinery which has entered serial production in Russia and Belarus.
"As of today, this includes cars and electric cars of all segments, trailers and semi-trailers, graders, bulldozers, tracked industrial tractors, loaders, rollers, and dump trucks," the Ministry of Industry and Trade noted.
Furthermore, within the framework of the project, it is proposed to consider a decision on deferred indexation of the recycling fee for excavators and backhoe loaders. For them, the possibility of indexation is being considered no earlier than 2026 and 2028 respectively.
In turn, Russia's largest automotive manufacturers - AvtoVAZ, KAMAZ, GAZ and Sollers - are in favour of increasing the recycling fee on cars. For example, the management of the GAZ automobile plant noted that this measure "in the context of a spontaneous influx of imports will form a systematic approach to regulation", and also "will support the production of Russian machinery and provide predictable conditions for implementing new investment projects aimed at creating a Russian component base."
KAMAZ stated that the initiative will contribute to the development of "highly localised production" and will also attract new investment.
AvtoVAZ added that this step "will be a significant incentive for foreign brands to invest in production projects on the territory of the Russian Federation, localise their suppliers, and create partnership projects with Russian automotive manufacturers."
For context, in Kazakhstan, a petition for the abolition of the recycling fee was published in early March on the state portal ePetition. It gathered more than 50,000 signatures. It was then reported by the Ministry of Culture and Information of the Republic of Kazakhstan that it had been accepted for consideration. Later, the government created a commission, which was tasked with travelling to regions and holding consultations, including visits to some factories and manufacturers.
Incidentally, the author of the petition himself, Sanzhar Bokayev, has missed a second public hearing on the issue of abolishing the recycling fee.