During the current session of the government approval was awarded executive legislative initiative proposing to review excise tax rates for excise goods. As a result, the price of cigarettes, alcohol, diesel, gasoline will increase.

In particular, due to the expected inflation in the coming years, to index the excise tax rates of goods subject to excise tax, setting the coefficient of 3 percent for each year. It is planned to increase the excise tax rates on tobacco products by 7 percent each year, on heated cigarettes by 30 percent each year, on electronic cigarettes by 100 percent in the first year, then by 25 and 20 percent in the following two years, and on hookah cigarettes by 40 percent in the first year, then by 30 percent each year in the following two years.

Chairman of the Republican Union of Employers, economist Gagik Makaryani according to him, the government increased the excise tax due to several circumstances, it is also understandable why it took that step after the elections.

Elaborating, our interlocutor said:

«The government has a lot of expenses, I don’t connect them with these elections, they are more related to the subsidies given to exporters. If the product is exported in the volumes specified by the Government, a lot of money will be needed to subsidize the brand, for example wine, tomorrow – dry goods, vegetables, etc. The government made a decision to subsidize new markets and with quite interesting figures. One problem with costs is this.

The second circumstance is that I think that due to the course of the elections, now and after, and even before that, entrepreneurial activity could be in a certain state of waiting. In general, during all elections in Armenia, entrepreneurs and businesses are almost expectant. Accordingly, their investments or work volumes may slow down to a certain extent and they may pay less taxes.” of 168.am Gagik Makaryan said in a conversation with

Continuing, the economist mentioned another circumstance, the Russian sanctions, which can significantly affect taxes, because those companies that were supposed to sell their products in the prescribed volumes and pay taxes, those taxes will decrease, because many cannot sell at the prices they sold before, or will not sell at all.

“Evaluating all this, plus the costs it has in connection with the pension, pension, insurance system, etc., the government tried to overcome this cost regime by increasing the excise tax. Changing tax rates in the middle of the year is a little inappropriate, it can cause anxiety, mistrust, disturb investors and there can be complaints.

And why now, not before the elections, it is clear that before the elections, all this would not be advisable, because these price increases affect the expenses of ordinary citizens more, so their dissatisfaction should not be provoked before the elections, because the Government was taking a more positive step before the elections, by which it wooed the citizen. It was not advisable to take unpopular steps before the elections,” G. added. Makaryan.

According to him, except for cigarettes, which only hits the pockets of smokers, the remaining price increases will affect everyone, both businesses and citizens, as well as vehicles may become more expensive.

After the excise tax increase, those citizens who will not have the opportunity to purchase this or that product at a high price will have to spend less. A smoker should smoke less, use the vehicle less, or spend more on it from the family budget.

“I think that other products may also become more expensive, we can assume that there will be inflation in the second half of the year, or that the existing inflation will be maintained, that is, there will be no decrease,” emphasized Gagik Makaryan.

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