Thursday, April 18 2019 12:57

ArmInfo.On April 18, the Armenian government approved the legislative initiative of the Parliament on exemption from VAT of transactions for the alienation of live  breeding cattle raised in Armenia, if alienation is carried out by  individuals who are not individual entrepreneurs.

The draft decision was adopted despite tough protest by Atom  Janjughazyan, the Minister of Finance, and Mher Grigoryan, Deputy  Prime Minister.

The First Deputy Minister of Agriculture of Armenia Gegham Gevorgyan,  introducing the draft decision, said that by approving the  initiative, the government ensures equal conditions for the local  producer and importer. The latter are already exempted from paying  VAT. It is also intended to stimulate domestic breeding livestock.

Armenian Finance Minister Atom Janjughazyan did not agree with the  argument. According to him, expanding the list of tax "exempts", the  government increases the loss of the state treasury. Thus, as the  head of the Ministry of Finance pointed out, the tax losses of the  budget due to various tax preferences for 2018 were estimated at 438  billion drams. According to the minister, if there is a desire to  support the local producer, it is possible to effectively <find this  farmer and pay the money directly to him>. As Janjughazyan stressed,  it is impossible to support the field, by offering fragmentary  solutions to problems and stimulating low productivity with tax  benefits.

Deputy Prime Minister Mher Grigoryan expressed a similar position.  "Fragmentary decisions in this area are a meaningless exercise," he  said.

"Yes, we have to increase low productivity with tax benefits," Deputy  Prime Minister Tigran Avinyan answered. According to him, in many  countries the state supports the sector not only with preferences,  but also with various subsidy mechanisms.

In turn, as the Minister of Economic Development and Investments  Tigran Khachatryan believes, today, speaking of lost tax revenues,  the authorities risk losing growth in the area of livestock breeding.   Prime Minister Nikol Pashinyan agreed with the arguments of the  initiative's supporters. He considered that until a more global  solution to the issue was found, it was worth going, including a  fragmentary solution.  As a result, despite the objection of  Janjugazyan and Grigoryan, the draft decision was approved by the  Cabinet.