The government isn’t offering to raise the Value Added Tax (VAT) since the VAT is, in its essence, a regressive tax, and any increase of taxes in percentages is a direct blow to the deepening of poverty. This is what Deputy Minister of Finance, main reporter Arman Poghosyan said during a discussion on the bill on making amendments to the Tax Code held as part of the special session of the National Assembly today.
According to him, the government’s optimal solution is to raise the excise tax to a certain extent.
He noted that the government plans to refuse the ad valorem excise tax rate since the existing system for excise tax implies unequal distribution of the tax burden between not only importers and local manufacturers, but also among commodities at different prices since, at the given moment, the tax is calculated based on the cost of the product.
“In addition, it turns out Armenia applies both the VAT and the excise tax, and this is also unacceptable in international practice,” he emphasized.