Wednesday, June 6 2018 22:21

ArmInfo.Pailak Tadevosyan, chairman of the Taxpayers Protection Alliance (TPA) , is far from the fact that the intention of the Armenian authorities to return trading  networks to the legal tax field will lead to an increase in prices  for basic food products.

"Let's not forget that in Armenia there are market relations that at this stage will force shop owners to work with a margin that will take into account the scale effect so that,  first of all, not lose the market and secondly - the supplier in the  person of the agricultural producer," - Pailak Tadevosyan stated in  an interview with ArmInfo.

According to the expert, even if we assume that in due time there  were any agreements between the government and large networks, which  give the informal right to underpay taxes to the latter, business  representatives in their statements clearly distort the essence of  this "deal". According to him, large networks, for example, the same  shops of Yerevan City, have a license that gives the right to  actually carry out trade activities in this area, including renting  it. At the same time, he added, if to follow the letter of the law,  the markets had the right to sell products through individual  entrepreneurs (IP), if the latter acts as both a buyer and a seller.  In this case, as the expert specified, the IP could act as a separate  economic entity - a taxpayer and nobody could reproach him with  anything. Meanwhile, de facto, only the documentary registration was  carried out through the FE, and most of the IP was registered even  without the knowledge of the "entrepreneurs" themselves, that is, a  massive forgery was carried out. In addition, when the turnover of IP  reached 115 million drams, their activities ceased or enterprises  were liquidated, after which new "forged" IPs were registered and  used.

In addition, taking advantage of the opportunity, the network,  optimizing the tax burden, began to conduct through the IP accounts  not only local agricultural products, but also ready-made meat  products like kofta, or in general agricultural importer. "Thus,  under the cover of agreements with the government, the laws were  violated very roughly," he said.

Tadevosyan agree that the revision of the existing order of sale of  agricultural products and the transition to the general tax field at  the initial stage will make some adjustments in the food retail  market. But, nevertheless, market mechanisms are able to balance the  situation. If prices rise significantly, the expert believes, people  will simply stop buying agricultural products in supermarkets. There  are many alternatives - starting with the market, ending with small  shops. Consequently, retail chains will have to look for trade- offs,  lower margins. In this case, if previously margin outlet was 50  conventional units at the price of goods to 100 units, then it will  continue limited to 10 - 20 units. The manufacturer, in turn, perhaps  will make concessions, because it is more profitable to take the  gross product in large volumes of network at a fixed price.

At the same time, Tadevosyan calls not to underestimate the "power"  of political statements. "Prime Minister of Armenia Nikol Pashinyan,  in response to the statement of representatives of supermarket chains  about a possible increase in prices, called for boycotting  supermarkets." The business became frightened, as they realized the  possible losses, including losses of customers frightening than just  a refusal to buy agricultural products, "he said. Thus, according to  the expert, there is no need to seek a direct correlation between the  tax rate and the possible increase in prices.

Currently, according to the head of the "Protection of taxpayers,"  the issue requires a comprehensive solution, since from a fiscal  point of view, small stores are no more disciplined than large  markets.  Monitoring the market shows that small and medium-sized  businesses are also reluctant to regulate their entire turnover. In  addition, as the economist noted, it is necessary to formally specify  what is meant by "agricultural products", whether it is necessary to  consider kofta, frozen cutlets and semi-finished products as such or  exclusively produce of local farms. Only then, as the expert pointed  out, you can talk about how to tax this product.

The expert is unambiguously confident that the possible reduction of  the threshold of the non-taxable annual turnover (2%) from 115  million AMD ($ 238 thousand) to 58.35 million AMD ($ 120,000), as it  was until 2015, is absolutely unjustified measure. "Serious expert  assessments and public hearings are needed here." The former  government ignored the opinion of the majority of experts that the  lower threshold should not be lowered, but instead increased to 150  million and even 200 million AMD, but with a rigid, uncompromising  condition for the release of goods through cash registers and fiscal  checks, "Tadevosyan said. According to him, as world practice shows,  it is the government's unwillingness to listen to the opinion of  professional communities and market players, ignoring their opinion,  leading to serious public discontent.