Taxes are being raised because Armenia’s economy is not growing. Economist

3 days after the elections, the Government raised excise taxes, which implies an increase in the price of cigarettes, alcohol and fuel.

The government has approved the draft law “On Amendments to the RA Tax Code”, which envisages revising the rates of goods subject to excise tax. According to the executive, the initiative aims to provide additional tax revenues, harmonize excise taxes with EAEU countries, as well as take into account the projected inflation in the coming years.

“When the law comes into force, the public will immediately feel the consequences, because it will have an immediate impact on tariffs.” 168.amreferring to the review of rates, he mentioned Economist Nairi Sargsyan, head of the “Armenia is me” political initiative.

Speaking about the justifications presented by the government, Nairi Sargsyan reminded that even before the elections, there were regular talks about the pre-election actions carried out at the expense of future taxes.

“When the government showed haste, introduced a health insurance system, increased pensions, etc., they were not planned with the budget, and if they were not planned, naturally, they would not meet the budget expenses, and I will not be silent about the revenues at all. In such a case, when the economy does not have the potential to increase the volume of products and services, there is only one option left: increasing the tax rate or expanding the tax base. Now they have to raise taxes, because in reality, Armenia’s economy is not growing.

Here comes the question: what tax should we raise so that a wave of public dissatisfaction does not arise immediately after the elections due to political turbulence, that is, we have an adequate answer to it? it is the excise tax. Excise tax is almost always interpreted by many governments of the world as being aimed at taxing products that are harmful to health, and thereby trying to prevent the sale of products that are harmful to health, such as tobacco and alcoholic beverages, and public sentiments are softened, he explained.

According to the economist, for now they are increasing the excise tax, but in the very near future we will witness an increase in other taxes, and its impact will naturally be negative on the social condition of the Republic of Armenia, on the people’s standard of living, from agriculture to processing production.

“Let me say one conditional point. if, for example, the daily service fee for agricultural machinery is 100,000 AMD to cultivate a certain X amount of land, then due to the excise tax, the price of diesel fuel will increase and it will become, for example, 120,000 AMD. And he will obligatorily include the 20,000 drams increase in the tariff of agricultural products, which, if we correlate with the expected opening of the Turkish border and the flooding of the Armenian market with Turkish products, creates a favorable condition for the unhindered sale of Turkish products in Armenia and the complete elimination of Armenian agricultural products, agricultural products in general, “said Nairi Sargsyan, adding that the logistical costs possible inflation as a result of the increase.

By the way, if this draft is accepted by the National Assembly, the new rates will start to operate on July 1, just one month after the parliamentary elections.

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