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. Last Updated: 07/27/2016

Russia Delays Ukraine Trade Taxes

Russia has delayed the threatened imposition of trade barriers on Ukrainian imports until Oct. 1 in an effort to reach a mutually agreeable solution, a government official said Tuesday.

"The decision to put off the introduction of new taxes for a month, was prompted by the Ukrainian prime minister's demands to have more time to pursue negotiations," said Mikhail Smirnov, deputy head of the indirect taxation department at the State Customs Committee.

The Russian government last month threatened to slap 10 to 20 percent value-added-tax on Ukrainian imports from Sept. 1 unless Kiev improved control of the flow of low-priced goods across the border, which Russian officials said undermined domestic producers.

A team of experts from both sides was appointed to find a solution after Prime Minister Viktor Chernomyrdin and his Ukrainian counterpart Pavel Lazarenko failed to iron out differences in talks last week.

Smirnov said it is still unclear whether the Russian government will start to collect VAT after Oct. 1.

"It is still too early to know what will happen, it will depend on what the governments decide," he said.

The question of introducing quotas on Ukrainian vodka imports was also left open, Smirnov said.