The Azerbaijani Cabinet of Ministers issued a regulation to exempt imported grain, meslin (a mixture of wheat and rye), wheat and rye flour from VAT, the Cabinet of Ministers said.
This decision entered into force after signing on Dec. 3 and will run until Aug. 1, 2011.
The decision was made on the basis of a proposal by economic development, agriculture, emergency situations, finance, and tax ministries, as well as the State Customs Committee.
According to the state program on providing the population with foodstuffs in 2008-2015, the volume of domestic grain production must hit 2.8 million tons per year. Roughly 147,000 fewer hectares were sowed in 2010 than in 2009.
Cancellation of VAT on imports of grain and flour should have a positive effect on volumes of supplies of Kazakh grain supplied by the private companies, and may also lead to lower prices for bread and flour in the domestic market of Azerbaijan.
Kazakhstan, represented by other companies, will continue to deliver grain to Azerbaijan, which annually imports about 1 million tons of wheat. It should also be taken into account that Russia has extended the ban on export of wheat from its territory, and Ukraine has also set quotas on grain imports.