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Russia expects a shortfall in scrappage fees as the car market struggles

The Finance Minister Anton Siluanov said to reporters Tuesday that Russia expects revenues from the scrapping of cars to be well below budgeted levels in this year. This could lead to some projects being abandoned.

Moscow planned to raise taxes this year on imported cars by doubling the scrappage fee for all manufacturers and increasing support from the state for locally made vehicles.

In Russia, both domestic manufacturers and importers of cars are required to pay an scrappage fee to cover future costs incurred by the state for managing the process of scrapping.

The decline in car sales has shattered expectations. In 2025, Russia planned to double its revenue from recycling cars to 2.01 trillion Russian roubles (24.77 billion dollars).

Siluanov, a reporter, said that the scrappage receipts this year are significantly different from the budget, but did not specify the magnitude of the difference.

He said that if scrappage fees do not generate the required revenues, projects could be cancelled.

According to the data of Russia's Industry and Trade Ministry, sales of new vehicles in January-April decreased by 27% compared to last year, to 404 016 units.

(source: Reuters)