The Multilateral Fund would not finance such costs as taxes, duties or other such transfer payments, nor the loss of economic subsidies or rates of return in excess of cost of capital which might incorporate non-economic financial effects such as administered prices or interest rates. Funding of the enterprises' financial costs by the Multilateral Fund would effectively be making the country a grant that exceeded the country's actual additional costs, which was not the intention of the Parties.
(UNEP/OzL.Pro/ExCom/10/40, para. 171A).
(Supporting document: UNEP/OzL.Pro/ExCom/10/39).
As there had been instances where Article 5 Governments had levied taxes or duties on equipment funded by the Multilateral Fund, the Twenty-second Meeting of the Executive Committee, reiterating the decision of its Tenth Meeting that no such taxes or duties would be financed by the Multilateral Fund, decided:
(a) to urge Article 5 Parties to exempt from taxes or duties any equipment bought under the Multilateral Fund;
(b) to urge the Implementing Agencies and the Secretariat to pursue their efforts to resolve the problem of levies, taxes and duties on equipment funded by the Multilateral Fund and to work with relevant countries to resolve any outstanding problems, including, if appropriate, an exchange of letters.
(UNEP/OzL.Pro/ExCom/22/79/Rev.1, Decision 22/5, para. 20).