On June 9, the National Assembly financial loan, budget and economic issues constant committee discussed the “bill for reforms in Armenia’s State Tax law” and Minister of Ecology Vartan Ayvazyan was the official governmental representative present during the discussion. Although the committee approved the bill, some MPs were complaining about this or that.
According to the 17th article of the “State Tax Law” passed in 1997, an annual 5 million AMD tax must be paid for using each mineral water mine. The government doesn’t believe that this amount stimulates the use of the mineral water ores. The profit gained from getting carbon dioxide and using the mines for medical treatment purposes is less than the profit gained by companies involved in bottling the mineral water. So, the 5 million AMD tax is a lot for the first. That’s why most of the mines today are used for bottling purposes or are simply used illegally. With the abovementioned bill, the government suggests differentiating the tax rates for using mines based on the purpose for using the mineral water. According to the bill, an annual 5 million AMD state tax is levied for using the mines for bottling, while that tax is 10 times less (500,000 AMD) for the companies using mineral water for getting carbon dioxide and using it for medical treatment.
According to V. Ayvazyan, this bill will help small and medium businesses working in the lithosphere. The minister says that there are eleven bottling companies with a license for using mineral water and the companies using the water for medical treatment must get permission from the 11 companies.
Republican MP Hermine Naghdalyan approved the bill proposed by the government, however she was trying to understand why 500,000 AMD and not less. According to her, it is required to make 100,000,000 dollars worth of investment for the mineral water bottling companies and millions of dollars for the companies using the mineral water for medical treatment. The first companies get more profit than the rest. Thus, H. Naghdalyan is of the opinion that tax rates have to be high. As a matter of fact, the MP believes that it would be better if there were no state taxes at all.
“We must subsidize and accredit those companies and not levy taxes. Thus, we will stimulate the medicinal mineral water usage policy,” says H. Naghdalyan. She says that this will help develop tourism, the health care centers and other substructures.
Republican MP Areg Ghukasyan didn’t agree with Naghdalyan.
“Are we supposed to allow the companies to use the mineral water free of charge?”
He added that even the 500,000 AMD tax has been reduced.
After hearing this, H. Naghdalyan couldn’t take it anymore and said to her fellow party member:
“Your business is doing good- would you like for us to make you pay more taxes?”
“I’m not talking about your business…” said A. Ghukasyan, referring to her rock ore business and others, which “168 Hours” has mentioned many times in the previous editions.
If head of the session Vahran Baghdasaryan didn’t persuade them to stop the debate, I would have been able to get more information about what other businesses these MPs have.
So, the bill looks good at first sight, but not for Armenia because after it is passed, all the companies will rush to register as companies using mineral water for medical treatment purposes and will start bottling. It’s quite possible that the law will be circumvented.