The recent resignation of the RA NA speaker and the events that followed mixed things up at the parliament. Some of the discussed bills that were brought to the parliament in that period should have been paid attention to. I mean one of the drafts concerning excise tax. The ULP faction proposed a bill, according to which excise taxes on cigar imports are to be reduced. This is logical: importers pay 1.500 AMD tax for importing one cigar worth 500 AMD. We may say that this change will not have any serious economical results. According to specialists of the cigarette market, almost half of this business is shady. Under the cover of fighting against shady economy the legislative branch sometimes reduces some taxes. For instance, during the recent years income tax was reduced to 20% from 35%. For example, the banking system had to pay more income taxes before (45%) like in almost all developed countries. Before, legislatives used to say that it is easier to get profit in this field than in other fields. But later, under the lobbying of bankers this approach changed and now they pay 20%. During the last years the social security payments were reduced too (for 8-10%). Those who think this is good, often bring an example from 1999. In that year under the domestic lobbying the parliament increased the taxes on imported tobacco. The budget that the government of Vazgen Sargsyan had inherited had much deficit. Probably that government thought that by increasing this tax they would provide good income in the budget. But they were mistaken. The shady sector of tobacco import became larger. And later, we don’t know whether for the purpose of cutting the shady share down or as a result of negotiations with importers, they decreased the tax rates. There was still a difference between domestic producers and importers, but anyway they were able to bring the market back on its feet. We have the same excise tax rates for tobacco now. Importers have to pay 5.500 AMD for each 1.000 pieces of cigarette, as for the domestic producers, they pay 4.000 AMD for selling that much in the domestic market.
There are many analyzers that don’t think this “flexible” taxation policy may do anything good for the country. The reason is the fact that the economical legislation of our country is not directly connected with the real management of economy. They have enough facts to prove this. First of all they say that the Government collects as much taxes as it plans for separate fields. It seems that these marks are not formed as a result of their economical activities, but as a result of their negotiations with the biggest companies. I.e. they find out how much taxes oligarchs are going to pay (the energetic, gas fields, copper-molybdenum production, etc.). In our real economical life these negotiations are more important than the relevant legal field. In this situation it is difficult to understand why the ULP developed such a recommendation on excise tax. According to the official information, Armenia imports 400 cigars per year. This means that the shady cover is already formed in this field. It is not right to call this step that the ULP made as populism, because the cigarette market is too small for that. It can hardly provide more than several million AMD to the budget even if it is taxed for 100%. The society, however, is indifferent to this. Accordingly, it seems like there is no answer to this question, especially when it coincided with the official publication of information about the functioning of another business field. It is very difficult to find logical explanations in a country, where the number of mobile phones increases by 345.000 per year, construction develops very fast, but the official capacity of cement production stays the same. You can see this if you look at the list of the biggest tax paying companies of Armenia. The copper molybdenum company, “Armentel” and “ArmRusGazard” companies and energetic system continue to be the biggest tax paying companies of Armenia. The other companies are just included in the list, nothing more.
As for the parliament, which spends over 2.600 million dram from the budget, it must at least adopt laws periodically. It must adopt laws with the purpose of helping the Government collect more money for the budget.