Saturday, November 22 2014

At the Nov 21 discussion on the jewelry and lapidary issues, Armenian Economy Minister Karen Chshmarityan advised the Armenian jewelers to hire Indian diamond-cutters to enhance labor efficiency. 

The minister made this proposal in response to the jewelers' numerous complaints about the current legislation and the requests to set sectoral preferences. The jewelers also complain of the uncompetitiveness in the foreign market as compared with the Indian lapidary companies, whose products cost cheaper.   

The jewelers unanimously pointed out that the current tax and customs regimes in Armenia do not contribute to development of the lapidary sector. In particular, they asked the minister to cancel the VAT on sales, because 85% in the prime cost is the raw material. Therefore, the tax base should be reduced.  The jewelers also complained of the customs broker institute introduced a few years ago and asked the minister to cancel it, because they have to pay extra 18 thsd AMD for each invoice. They also complained of the lack of the highly skilled diamond-cutters. 

As the owner of the "Murad Mirzoyan Diamond" company Murad Mirzoyan said, diamond-cutters get so little for their work, that it is more beneficial for them to drive a taxi. Therefore, there is shortage of specialists at his company and other companies as well. 

The minister said that the work is also good, and specialists  should be paid for their work as much as it allows them not to leave. As for the VAT, he said that similar situation exists in many other branches of economy where raw materials cost much. Many companies have been using the imported raw materials, which is 70-80% in the prime cost of a good, for instance, pharmacy, chemistry and other branches. However, this is not the reason to reduce the VAT for them. The minister also added that starting 1 January 2015, many customs regimes will change, as Armenia will join the EEU. He drew attention at certification of jewelry which may become a serious problem for development of the branch and sale of the Armenian production at the external markets.