Buying gasoline - privilege of the rich or raising the base rate of excise taxes on fuel will not lead to an increase in the costs of citizens - the Armenian State Revenue Committee

ArmInfo. Deputy Chairman of the  State Revenue Committee of Armenia Vakhtang Mirumyan considers  unjustified statements that raising the base rate of excise taxes on  gasoline, diesel fuel and liquefied gas can lead to an increase in  the tax burden for citizens and economic entities of the country.

He  said this on January 23 at a hearing in the parliament on the "Causes  of rising prices for certain types of goods and opportunities to  mitigate the consequences of this."

Vakhtang Mirumyan recalled that from January 1, 2018 the new Tax Code  came into force, within which the base rate of excise on fuel was  increased. This, according to Mirumyan, was almost the only tax  change that led to a certain increase in the tax burden. In parallel,  the TC envisaged more than two dozen proposals aimed at improving the  business environment and mitigating taxation conditions. "In this  case, excise tax was considered, in fact, the only type of tax that  could compensate for losses of state treasury, expected by the  results of measures to improve the business climate," - said the  deputy head of the SRC. The main question asked by the Committee is  whether raising the excise tax rate on fuel can have a chain effect  and lead to an increase in prices for certain types of goods. So,  since January 2018, excise tax on gasoline and VAT (per 1 ton) has  been increased by 15 thousand drams, that is, 15 drams per 1 kg.  "It's not a secret that in Armenia gasoline is not used for  industrial or commercial purposes, therefore, it is more than obvious  that raising this tax can not lead to an increase in prices for final  goods," Mirumyan said. On the ordinary consumer - the income of the  socially unprotected strata of the population also will not affect  the increase, since, according to the tax and customs service, this  group of citizens exploits vehicles on liquefied gas, the purchase of  gasoline is the privilege of wealthy consumers. The increase in the  excise duty on liquefied gas, plus the VAT amount per 1 cubic meter,  was 20 drams, thus ensuring a return to the indicator for the year  2015. "In this price environment, public transport has already  worked, so do not expect an increase in the tariff for public  transport," he said. As for the vehicles used by ordinary citizens,  Vakhtang Mirumyan recalled that the new norms of the TC provided for  a reduction in the tax burden for citizens who receive wages less  than 279 thousand drams, which is 540 thousand or 90% of all  employees. Thus, according to the official, if something has gone  somewhere, it has arrived and there is an opportunity to compensate  for additional expenses. According to the excise duty on diesel fuel  Vakhtang Mirumyan noted a decrease in the base rate from 35 thousand  to 13 thousand drams (per 1 ton). At the same time, taxation of this  type of fuel is included in the field of VAT regulation. And if by  2018 the price of diesel fuel was set at 380 drams, as a result of  the changes it reached 440 drams. At the same time, thanks to the  changes, today the carrier can claim a VAT refund of 74 drams. "In  fact, the cost of diesel fuel is 366 drams, that is, 14 drams less  than it was before the entry into force of the Tax Code," he  explained. In the absolute loss is the sphere of agriculture, because  it is exempt from VAT and can not hope for a similar "bonus" of tax  regulation.  Nevertheless, Vakhtang Mirumyan considers unjustified  statements that raising the base rate of excise taxes on gasoline,  diesel fuel and liquefied gas may lead to an increase in the tax  burden of citizens and the country's economy.