In one of the previous releases of our newspaper we mentioned that the state despite its promises and pledge to support the small and medium businesses, formation of the environment of understanding virtually does the opposite. As a precedent of the abovementioned we have mentioned the tax package suggested by the government, which wasn’t formerly discussed with the businessmen.
Yesterday another indirect evidence of the previous statement appeared in the press. A press-release about the recent regular meeting of the American Chamber of Commerce in Armenia (AMCHAM) was spread yesterday. Before addressing the press release let’s mention that more than 80 companies such as Coca-Cola, “Armenia” International Airports, Arsoil JV CJSC , etc. are AMCHAM members. According to the press release, the above mentioned meeting incorporated directors of “Byblos Bank Armenia”, “First Mortgage company”, “Cascade Insurance”, “Armenian Copper Program” CJSC, NASDAQ OMX Armenia, etc. Thus, we may say that the announcement highlights the viewpoint of the big business of Armenia. Now let’s speak about the main announcement. We are not going to put it here from the beginning to the end; we will just mention two important points. According to the announcement, the tax increase will have negative influence on the competiveness of the RA in the region. Besides, the tax increase may bring to decrease of foreign investments. And secondly, the directors mentioned that the draft laws on “luxury tax” were not available for the public. They expressed their concern about it. It means that it doesn’t matter how good or bad the tax package is. The businessmen didn’t like the fact that their opinions were not taken into account while preparing the draft law. Besides, the tax package is not good as it will negatively influence on the competitiveness of the RA and foreign investments to Armenia. Truly, it was a pleasant surprise as it is difficult to remind any incident when serious companies criticize the government with a joint announcement. Of course, it is not excluded that after the responds several companies will “make excuses” and announce that they didn’t participate in the meeting and don’t share the viewpoint. However the number of those who participated in the event and signed the document is enough to form an opinion on the Armenian business attitude towards tax package. By the way, if we draw parallels with the recent summit of the Union of Manufacturers and Businessmen (Employers) of Armenia one may have an impression that there are two Armenians with different business environments. The most amazing is the fact that the government continues to speak about the state-private sector cooperation. “Our aim is strengthening our industry and increasing exports through the government-private sector cooperation,”- announced Prime Minister Tigran Sargsyan during the regular sitting of the Board of Trustees of the National Competitiveness Foundation of Armenia held in Sevan on November 13. According to the official release the Prime Minister presented the details of the industrial development strategy of Armenia elaborated jointly with the World Bank. Sargsyan clarified that the strategy implies an economic policy aimed at increasing the exportation rates. Specifically, the strategy includes the 11 branches of industry. “We have tried to explore the industrial potential of our country in accordance with the branches. We tried to evaluate what raw material potential we have, what intellectual and infrastructural resources,” said the Prime Minister and added that the project developments of the three sectors – cognac production, pharmaceuticals and fine machinery, have already been developed and discussed with the President of Armenia and jointly with the private sector. The government is sure that as a result of strategic programs the rates of exportation will drastically rise. Specifically, the rates of cognac exportation in 2020 will be tripled and the exportation of the pharmaceuticals will be increased by four times. “The strategy clearly fixes what duties this function should have. This is a serious step because for the first time in the Armenian history we have an industrial development strategy with clearly defined branches and priorities developed in this regard,” said the chair of the government. Under these circumstances perhaps we all got thrilled but the reality is that the so-called strategy is so diminished in Armenia and we have so many developed strategies remaining on paper that it would be naïve to be thrilled by that. And the businessmen believe not in the strategies and eloquent projects but the tax legislation amendment (especially when they feel the impact of these revisions on their own pockets). Let us also add that yesterday the minister of finances Vache Gabrielyan also provided details about the tax revision package. When alluding to the allegations that the increase of taxes by 101 billion AMD is troublesome, Gabrielyan mentioned, “If we are speaking about the concerns, as the world macroeconomic indices are fluctuating it yet doesn’t mean that the package is risky.” Gabrielyan also mentioned that the reforms in the tax field will be consistently continued but he wished that the process could have been speeded up. “Of course, in this regard, the place that Armenia currently occupies is not satisfactory. And this is the opinion of the government as well but Armenia doesn’t have the opportunities to tale on revolutionary steps and initiatives,” said the minister of finances. He said that if in large countries there are no cataclysms and if there are no catastrophic consequences in the sector of agriculture then the implementation of this ambitious budget is realistic and the planned amount of money can be collected. We just need to hope that this year “ifs” will pass Armenia.