Fighting Against Shadow Economy will Lead to New Rise in Prices: New Bill Discussed in Parliament

Armenia's National Assembly on May 13 began discussing the draft Law on Additions and Amendments to the RA Law on Trade and Services, which aims to reduce the shadow economy. The bill aims [AM] to label packaged dairy products, coffee, tea, cooking oil, vinegar, ice cream, cosmetics, and soap with excise stamps, which cost 3.5 AMD each.

During discussion of the bill, MP Edmon Marukyan (no party affiliation) said the bill leaves many questions unanswered; for example, there is no clear list of goods that must be labelled with excise stamps. Moreover, requiring excise stamps will lead to a rise in prices, which is made worse in light of the fact that salaries have not been raised: this is expected to occur in June — and only for civil servants. 

Rule of Law MP Heghine Bisharyan also raised concerns. She is convinced that the bill will harm small and not big business. "We will harm first of all small businesses. I don't want to justify it, but some people were able to feed their families due to the shadow [economy] — they made lemonade and so on," she said.

Armenian National Congress MP Nikol Pashinyan, in turn, focused on the sugar business: "According to the State Revenue Committee, the deficit of sugar in our country amounts to about 15,000 tons; that is, 15,000 tons of sugar will not be enough for us for the months January–March. But, as you can see, there were no queues for sugar in Armenia, and sugar was sold in stores as usual. But again according to official statistics, no sugar was produced in the months of January–March; instead, 30,807 tons of raw sugar was imported. That is to say, the raw material was imported, but sugar was not produced. Can you not conclude from this that sugar is imported along with the raw material, and this is done in order to avoid [paying] customs duties or taxes? This is a turnover of millions, billions of dram, and even in the official statistics it shows that here we are dealing with enormous corruption risks," he said. 

Note, having the monopoly on importing sugar in Armenia is Alex Grig, which belongs to ruling Republican Party of Armenia MP Samvel Aleksanyan.