Last economic week was a week of tariffs. A lot of information was published about tariffs in Armenia. It was too much and very strange. In the beginning Haykakan Zhamanak newspaper published the interview of Armentel company general director Igor Klimko. In answer to the journalist’s question whether it is true that Armentel wanted to reduce the prices of landline telephone services but the committee on regulating public services did not let them do that the head of the company neither approved nor rejected that information. Based on his answer we may assume that there had been such thing but he did not want to say it in an open text. Later more interesting thing happened. The editorial of the mentioned newspaper published two texts refuting that information. One of the texts was published on part of Armentel, the other one on part of the committee on regulating public services. Even they made references to legal acts and laws. They referred to laws to explain that according to the law they can only establish the highest level of prices, and companies have the right to reduce prices without agreeing with them. In this case it is not about the law but its application. In other words, it is about the freedom companies have enjoying the rights established by the law. Yesterday the committee on regulating public services announced that had agreed with the application to reduce the prices for Internet service wholesale provision. Following this announcement the head of the Armenian electric networks announced that the price of electricity would not be increased during the coming two years. Everyone knows that in that period no tariffs will be raised. The reason is the fact that during the coming two years there will be elections. There will be parliamentary elections in 2012 and presidential elections in 2013. Our experience since independence shows that the authorities always find a way to move the increase of prices of goods after elections. This time it is not about increasing prices of goods but reducing prices for certain services. We wonder why the authorities do not want the tariffs for services to be reduced. Let’s take that the authorities are not the enemy of the society and do not want bad for the society. This is not logical also in consideration of the fact that tariffs have influence on macroeconomic situation as these rates are important for people. Accordingly, tariffs provide solid incomes to the budget. When the HES applied to the committee on regulating public services to increase the rate of electricity from 25 to 30 drams per kw the committee agreed with pleasure because the budget has a share from that amount. According to the official information, if the price per kw is 25 drams, the budget has 5 drams from it, and if it is 30, the budget has 6 drams. Only in this situation the government grabbed more than 4 billion drams from people. Instead of improving the tax policy they decided that this option would be better. It is not a good explanation for taxpayers and it is not a justified decision. In addition to this problem also inflation impacts the economic condition of not only consumer but employers as well. Armentel used to be the largest taxpayer in Armenia for several years. Now this company is one of the largest taxpayers again. In 2009 this company was the fifth largest taxpayer and paid approximately 14 billion drams. The second largest communication service provider VivaCell (K-Telecom) was the fourth largest taxpayer and paid 13.6 billion drams. In the last quarter of this year Armentel was the fourth largest taxpayer. This means that in fact the government is not interested in reduction of tariffs. Lower tariffs will result in less inflow to the budget. For this purpose the communication companies have to invent new package solutions and offers not to lose their places in the market. In an interview the general director of Armentel company says that they have found a solution for offering lower tariffs for landline telephone communication services starting from next year. This time the committee on public services will have to agree for this option because a new company will come into the market of landline phone communication next year. The second company in this sector will be more flexible, progressive and definitely will offer more flexible prices and services. U-com company is making capital investments and with its aggressive economic policy is making a lot of changes in the sector. This is a new company and maybe has tax privileges. In 2011 U-com company was in the 339th place with 116 million tax payment. Now the government should think about companies that are hens that bring golden eggs for it. Thus, the government has agreed to reduce the wholesale price of Internet provided by Armentel. Consumers will be able to see what their benefit is from this reduction in a couple of months. Starting from January 1 it will be clear how much Armentel company will be able to reduce the prices for landline phone communications services. However, one thing is clear for sure that the government does not like the idea of reducing the tax incomes to the budget. Because if it happens they will have to work; they will have to do more to increase the budget incomes. It is something that is not envisaged in the government’s plan of either this year or next year.
