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Tube Works of Azerbaijan Asks Privileges from Government

Business Materials 13 February 2008 18:18 (UTC +04:00)

Azerbaijan, Baku, 13 February / corr. Trend I. Khalilova/ Azerboru joint stock company (Sumgayit Tube -Rolling Mill) proposed the Government to cancel the VAT (value added tax) on the import of the raw materials for the production of the tubes, which leads to rise in the price of prime cost of the product.

Azim Azimov, the general director of the company, said that the company exports 92% of its ultimate products, and as the export operations are exempted from custom dues and taxes in Azerbaijan, Azerboru can not compensate the expenditures spent on VAT.

"It causes setbacks for the activities of the mill, as the expenditures on the raw materials make up 70% of the prime cost of the product," Azimov said.

The company has to pay $70 to $80 for every ton of the imported raw material from Russia and also we have to pay more for 150-200 tons of the raw material, respectively. However, the import from Russia will be stopped because of the restoration of the Mining Centre in Dashkesen and also after the launch of the steel plant in Ganja.

According to Rustam Shahbazov, the deputy head of the State Committee on Property Management, the Ministry of Taxes of Azerbaijan draws up an act on introduction of the tax privileges for the imported raw materials.

The head of Azerboru said that more chances are provided for the company to transport its products to the world markets due to the geographical position of Azerbaijan and after the launching of the Baku-Tbilisi- Kars railway. The privileges are needed to be established, to secure the competitiveness of the company. The head of the company proposed to freeze the debts temporarily during the implementation of the program of recovery of the company.

"The cancellation of the debts, from1 November of 2003, helped the company to restore its activities to some degree, however, new taxes have appeared due to rise in the price of energy sources," Azimov said.

In line with deal with the Russian Neftgazsbit, the boring casings-produced in Sumgayit are exported to Russia, Kazakhstan and Ukraine by the company.

The correspondent can be contacted at: [email protected]

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