The government has made a decision and closed the issue of cars with Georgian plate numbers. The owners of cars subject to compulsory customs proceedings were given an opportunity to postpone the payment. This was not the result the owners of those cars were struggling for, which means that the demonstrations may continue.
Those people who don’t have cars or their cars do not have Georgian plate numbers do not understand the essence of this issue.
The owners of those cars with Georgian plate numbers are struggling to keep the Georgian plate numbers as it gives them an opportunity to have the abbreviation of their names on the cars and also save a lot of money. For example, the customs payment price for an E class Mercedes made in 2005 is approximately $1200-1400 in Georgia, but the minimum price for customs payments in Armenia is $5000-6000. It is more expensive in Armenia and people don’t want to pay that much money. They could even form in the documents that they are importing to Armenia and once a year cross the border and drive back and keep the car for another year without going through the customs proceedings. According to the deputy director of the state incomes committee Armen Alaverdyan, there are approximately 10-15 thousand cars with Georgian plate numbers in Armenia.
Why is the customs payment high in Armenia?
The officials of the sector think that the prices are not high in Armenia. Importers have to pay 20% VAT and 10% customs fee (besides the Russian cars) and environmental fees, which are high, especially for old cars. In a word, in order to pass through the customs proceedings one has to pay 32-40% of the car price, which is not the price the importers paid for their cars, but the price that is evaluated and established by the customs services. Thus, one may be asked to pay 1500Euro customs fees for a car that was bought for 1000Euro in Germany. The state incomes committee officials say there are countries that are not trusted and they may issue fake invoices with smaller sums. For example, in Arabic countries it is very easy to negotiate with sellers and take an invoice of $5000 for a car that costs $15000. In such situations we understand why the state incomes committee does this, but we don’t understand why they do the same with the cars that are imported from Germany, France or other developed European countries that do not contain such risks. There was a time when the customs services used to publish the prices of cars according to their lists to inform people how much the customs payment could be. Now these prices are not published. The deputy chief of the state incomes committee Armen Alaverdyan said the following to the news.am: “Personally I think it was wrong to publish these prices. Cars are different as their characteristics and conditions are different. They are different with the amortization, damage and other conditions. People do not trust the customs services.” Neither people trust the customs services nor the customs services trust importers.
We wonder why these rates are so high, for example compared to the rate in Georgia. We do not produce cars, thus we cannot say that it is done to encourage the domestic production. On the other hand, they say that if the customs fees are cheap, Armenia will become a cemetery of old cars. It is not like that in Georgia as the old cars are later imported to Armenia from Georgia because there is some limit, after which it is cheaper to import a car from Georgia than from Germany. This means that not the low but high costs are making Armenia a cemetery of old cars.
Budget is the most important
The most important goal in these affairs is budget incomes. The import of cars is in the third place (after gas and oil products) in the list of imports to Armenia. According to the information of the state incomes committee, during 2010 approximately 17.000 cars were imported in Armenia. The customs price of these cars was estimated at 155.6 million dollars. This means that 30 million dollars have been paid to the budget as a result of car import. This is a serious sum for our small economy. If there are 10-15000 cars in Armenia that have not passed the customs procedures, it means 20-25 million dollars has not been paid to the budget. Our state could not ignore this and is taking measures against it.
Only Armenian plate numbers
On February 5 the temporary import regime was changed, which means that now people can import a car only once with 15. Within these 15 days the cars have to be formed legally and undergo all customs procedures. “If they fail to do this, they will have problems because according to the law they will be fined and have to pay 10% of the customs price of their car. If they fail to pay the money after this punishment too, for the delay they will have to pay interest rates too,” informs the committee. Certainly this decision provoked the anger of the owners of cars with Georgian plate numbers because it is about a lot of money. There were demonstrations, which were followed by the government’s decision (with the formulation of prime minister Tigran Sargsyan).
Compromise or a demonstration of compromise?
On February 24 the government held a session and made a decision to give privileges to the vulnerable groups of the society to import cars. The issue was raised by the finance minister Vache Gabriyelyan. According to this decision, the government gives an opportunity to pay the customs fees within 6 months. According to this decision, the government does not prolong the payment, but provides a borrowing without any interest rate to citizens to cover this money. They have to apply to the regional administration offices and the government, which will act like a bank for them. The most interesting thing is that the borrowers will have to pledge their cars, for which they are taking the borrowing. This law concerns only the cars that were produced before 2005 and are not more expensive than 5 million drams. The government assures that there will not be any bureaucratic problems and the procedures will be done by the government. Drivers are not happy with this decision and say that this was not a compromise and the government only delays the term of the payment. These people believe their government is embezzling them because they say the Georgian government creates better conditions for them than the government of their own country. The government brings arguments to prove the opposite too. “It is worth mentioning that before this change, when the term of temporary import was one year, the issue was discussed too because it created unequal conditions for importers.” This is done for the sake of equity; it is not about money only…