Reduction of VAT on long-distance transport by up to 10% will enable RZD to buy cars for 10 billion rubles

MOSCOW, November 10. The decrease in the rate of value added tax (VAT) from 18% to 10% will allow JSC “Russian Railways” (RZD) to allocate about 10 billion rubles for the purchase of passenger carriages. This was announced by the President of the Russian Railways Oleg Belozerov during the parliamentary hearings for passenger transport.

“Long-distance it is necessary to create a more or less equal terms between different modes of transport, including rail and aviation. We would ask in this part is also to reduce the rate of value added tax – at least up to 10%, but in General, would be considered the correct rate of value added tax in the suburbs and 0%. This would give us the opportunity of about 10 billion rubles next year to invest in cars that would allow us to reduce the cost and load our production”, – said the head of Russian Railways.

According to the Vice-resident of the Russian Railways, General Director of Federal passenger company Mikhail Akulov, this measure will allow to acquire the 186 cars, including 74 – two-storeys.

Earlier it was reported that the transport Ministry proposes to reduce the rate of VAT for passenger transportation in long-distance trains from 18 to 10%. Deputy Minister of transport Alexei Tsydenov estimated shortfall of budget revenues from the introduction of this measure in 10 billion rubles per year. The Railways expressed the need for a zero VAT rate.