Armenian State Revenue Committee to monitor how justified are price changes

ArmInfo. The Armenian State Revenue Committee will monitor to which extent the price changes are justified, if any. Commenting on the publication of mass media about the price increase in large supermarkets, they are forced to refuse florid tax schemes through fake individual entrepreneurs and return to the full VAT tax field, the head of the SRC David Ananyan stated.

According to him, he heard that it is possible to raise prices by 50-60% as a result of switching to full documentation of the profits of network retail trade. A number of experts also said that in due time, appropriate internal agreements were reached with the former leadership of the SRC precisely to reduce prices and ensure the competitiveness of large networks. As Ananyan pointed out, the issue is very clear.  "If we state that economic entities should act exclusively within the law, it means that if the supermarket works in the field of VAT taxation, then agricultural and meat products should be taxed in full. If within the payment of these taxes there will be 50-60 % growth in pricing, then this is a market relationship. This will mean that the nearby small shops will be more competitive," he explained. At one time, he said, supermarkets believed that they should compete with small outlets in the neighborhood, ignoring the scale effect.

David Ananyan noted that in this case, SRC holds the following position: "If there are still such price changes, we will conduct studies to see whether the price increase is justified or reliable. If this is real, then we do not see any problem in this, at least the SRC should not have a resource to contain prices." At the same time, he noted that if in the process of working exclusively within the framework of the law, the SRC will see that this leads to certain problems and there is a need to revise the legislative base, then the Committee should apply to the Ministry of Finance with a similar proposal. "While the legislation operates in this way, regardless of whether it is good or bad, everyone is obliged to fulfill their obligations under the law," said David Ananyan.

The head of the tax and customs committee noted that in the course of public discussions aimed at improving the tax field, the issue of taxation of the agrosphere will be raised. At one time, as Ananyan reminded, he advocated the imposition of a 10% VAT on the agricultural sector. However, a number of representatives of the sphere opposed this idea, and it was frozen. The solutions, he pointed out, are many.  But in any case, it is necessary to weigh all the risks to the budget and the possible benefits that the country's economy will receive in the long term, when implementing tax reforms. "All decisions will be taken only after discussions," David Ananyan said.  For today, as the head of SRC reminded, the department is waiting for the results of the recent meeting with representatives of large supermarket chains. Then representatives of the business set out the basic principles of working with the agency, and supermarkets were given 3-5 days to settle software problems with cash registers in order to return to the legal field. The time for tomorrow and tomorrow expires, then the department will begin to fulfill its immediate duties with a view to ascertaining how correctly they have estimated the message of the SRC.

On May 30 the National Security Service of Armenia announced the disclosure of the scheme by which large retail chains evaded taxes for years. By creating numerous IPs, Alex Holding LLC instead of VAT at a rate of 20% and the profit tax paid only the turnover tax (2%), processing the goods on fake IPs. As reported by the SNB, according to reliable data, a similar opportunity was given to 11 other large companies engaged in network trade from the former management of SRC, which created obviously unfavorable and unequal competitive conditions for other enterprises engaged in agricultural trade and paying VAT. "Therefore, the latter is invited to independently recalculate unpaid taxes on the above schemes and provide relevant information to the preliminary investigation to resolve the issue of compensation for damage within the production," - said in a statement of the department.

Meanwhile, the head of the RPA parliamentary faction, Vahram Baghdasaryan, stated that the statement of the SNS about carrying out business through more than 300 private enterprises and tax evasion is untrue.  He argues that the mechanism that operated in network supermarkets was introduced as a result of discussions about which everyone knew and in which he personally participated.

Against this background, some media, as well as representatives of the former ruling Republican Party of Armenia, argue that combating corruption will lead to higher prices in retail trade.