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.