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Azerbaijan abolishes VAT exemption on imports of grain, flour and meslin

Business Materials 12 July 2011 13:19
The Azerbaijani Cabinet of Ministers decided to abolish the exemptions from VAT of imported grain, meslin (a mixture of wheat and rye), and wheat and rye flour starting July 10, the Cabinet said.
Azerbaijan abolishes VAT exemption on imports of grain, flour and meslin

Azerbaijan, Baku, July 12 / Trend I.Khalilova /

The Azerbaijani Cabinet of Ministers decided to abolish the exemptions from VAT of imported grain, meslin (a mixture of wheat and rye), and wheat and rye flour starting July 10, the Cabinet said.

These exemptions were introduced on Ded.3, 2010, and were supposed to be enforced until Aug.1, 2011. The VAT rate in Azerbaijan is 18 percent.

Based on the State Program on the reliable provision of Azerbaijanis from 2008 to 2015, domestically produced grain must be provided at 2.8 million tons per year. In 2010 grain was sown on 147,000 hectares, amounting to less than what was sown in 2009.

According to the Azerbaijani Ministry of Agriculture, domestic wheat-sown areas declined by 51.4 percent this year.

"By June 22, 2011, wheat was sown along 268 hectares, whereas last year it was sown along 551 hectares," the ministry said.

Azerbaijan is expected to produce 2.5 million tons of grain in Azerbaijan, which is 500,000 tons more than last year, the Minister of Agriculture Ismet Abasov told journalists earlier.

"We forecast production of 2.5 million tons of grain, assuming favorable weather conditions - 1.7 million of which will be food grain," he said.
Barley is planned to yield 800,000 tons in 2011.

Last year the country harvested more than 2.000 million tons of grain, which is 33 percent less than in 2009. Some 20.7 quintals of grain were harvested from each hectare of land, on average.

Abasov said today the country's demand in grain crops is 3-3.2 million tons.
"Whatever remains lacking will be imported from other countries. Today Azerbaijan imports grain from Russia and Kazakhstan," Abasov stressed.

He said that although last year's grain production in Azerbaijan fell, due to adverse weather conditions, a deficit was not observed on this type of production in the country.
"Azerbaijan's grain demands (as well as all types of agricultural products) will also be fully met this year," Abasov said.

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