Thursday, April 26, 2012 -
Experts warned that Kyrgyzstan’s proposed tax changes, which are designed to strengthen the country’s fisheries, will kill the domestic fish feed industry, an industry web site reported on Wednesday.
The fisheries department is spearheading amendments to the tax code that will set a zero VAT (value-added tax) rate on all imports of fish feed. The rate is currently set at 12 percent.
The fisheries department, which comes under the ministry of agriculture and land reclamation, aims to enlarge its stocks of commercial fish species with the measure, thereby creating greater incentives for the development of domestic fisheries.
But Kyrgyzstan’s leading fish feed business says it will not be able to compete with European manufacturers.
The head of the country’s largest producer of fish feed, known by the trademark CombiFood, told a press conference last week his company may be forced to close down if the measure comes into law, the AllAboutFeed.net news site reported on Wednesday.
CombiFood produces high-energy pelleted feed for sturgeon, rainbow trout and carp species.
“The price for our feed is 85 soms [$1.81] per kilogram, while the price of imported feed from Europe is 120-140 soms [$2.56-$2.98]. If the parliament decides to remove the VAT, the price of foreign food will fall to 90 soms [$1.92], placing us at a disadvantage," CombiFood chief Bakyt Degenbaev said.
CombiFood dominates the domestic market as the supplier to feeds to most of the country’s fish farms.
It also exports a large portion of its production to neighboring Central Asian republics of Kazakhstan, Tajikistan, and Turkmenistan.
The company’s annual fish feed production is around 110 tons.