Armenian State Revenue Committee to monitor how justified are price  changes 

ArmInfo.The Armenian State Revenue Committee will monitor to which extent the price changes are justified, if any. Commenting on the publication of mass media about  the price increase in large supermarkets, they are forced to refuse  florid tax schemes through fake individual entrepreneurs and return  to the full VAT tax field, the head of the SRC David Ananyan stated.

According to him, he heard that it is possible to raise prices by  50-60% as a result of switching to full documentation of the profits  of network retail trade. A number of experts also said that in due  time, appropriate internal agreements were reached with the former  leadership of the SRC precisely to reduce prices and ensure the  competitiveness of large networks. As Ananyan pointed out, the issue  is very clear.  "If we state that economic entities should act  exclusively within the law, it means that if the supermarket works in  the field of VAT taxation, then agricultural and meat products should  be taxed in full. If within the payment of these taxes there will be  50-60 % growth in pricing, then this is a market relationship. This  will mean that the nearby small shops will be more competitive," he  explained. At one time, he said, supermarkets believed that they  should compete with small outlets in the neighborhood, ignoring the  scale effect.

David Ananyan noted that in this case, SRC holds the following  position: "If there are still such price changes, we will conduct  studies to see whether the price increase is justified or reliable.  If this is real, then we do not see any problem in this, at least the  SRC should not have a resource to contain prices." At the same time,  he noted that if in the process of working exclusively within the  framework of the law, the SRC will see that this leads to certain  problems and there is a need to revise the legislative base, then the  Committee should apply to the Ministry of Finance with a similar  proposal. "While the legislation operates in this way, regardless of  whether it is good or bad, everyone is obliged to fulfill their  obligations under the law," said David Ananyan.

The head of the tax and customs committee noted that in the course of  public discussions aimed at improving the tax field, the issue of  taxation of the agrosphere will be raised. At one time, as Ananyan  reminded, he advocated the imposition of a 10% VAT on the  agricultural sector. However, a number of representatives of the  sphere opposed this idea, and it was frozen. The solutions, he  pointed out, are many.  But in any case, it is necessary to weigh all  the risks to the budget and the possible benefits that the country's  economy will receive in the long term, when implementing tax reforms.  "All decisions will be taken only after discussions," David Ananyan  said.  For today, as the head of SRC reminded, the department is  waiting for the results of the recent meeting with representatives of  large supermarket chains. Then representatives of the business set  out the basic principles of working with the agency, and supermarkets  were given 3-5 days to settle software problems with cash registers  in order to return to the legal field. The time for tomorrow and  tomorrow expires, then the department will begin to fulfill its  immediate duties with a view to ascertaining how correctly they have  estimated the message of the SRC.

On May 30 the National Security Service of Armenia announced the  disclosure of the scheme by which large retail chains evaded taxes  for years. By creating numerous IPs, Alex Holding LLC instead of VAT  at a rate of 20% and the profit tax paid only the turnover tax (2%),  processing the goods on fake IPs. As reported by the SNB, according  to reliable data, a similar opportunity was given to 11 other large  companies engaged in network trade from the former management of SRC,  which created obviously unfavorable and unequal competitive  conditions for other enterprises engaged in agricultural trade and  paying VAT. "Therefore, the latter is invited to independently  recalculate unpaid taxes on the above schemes and provide relevant  information to the preliminary investigation to resolve the issue of  compensation for damage within the production," - said in a statement  of the department.

Meanwhile, the head of the RPA parliamentary faction, Vahram  Baghdasaryan, stated that the statement of the SNS about carrying out  business through more than 300 private enterprises and tax evasion is  untrue.  He argues that the mechanism that operated in network  supermarkets was introduced as a result of discussions about which  everyone knew and in which he personally participated.

Against this background, some media, as well as representatives of  the former ruling Republican Party of Armenia, argue that combating  corruption will lead to higher prices in retail trade.