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Talking about the recent increase in prices for a number of goods, RA National Assembly Deputy Speaker Eduard Sharmazanov made a noteworthy statement, “The government did not bring increase in prices from home. The government and the political majority will be the first to take strict measures where there is a subjectivity factor.”
Let us try to see where the government has “brought” the price hike from, and to what extent it is objective.
Price increases in petrol, diesel fuel, compressed natural gas and lubricants are entirely caused by the new Tax Code, which came into force on 1 January 2018.
Based on the Tax Code “brought” by the authorities, the excise tax for petrol imports has increased by 15 thousand AMD per 1 ton. That is, previously the excise tax per 1 ton of petrol was 25 thousand AMD, and currently it is 40 thousand AMD. The excise tax on 1000 cubic meters of condensed natural (automobile) gas has increased by 16670 drams, as a result of which the tax for one cubic meter has increased by about 17 AMD.
Before 2018, the import and disposal of diesel fuel was exempt from VAT tax, and the excise tax amount per 1 ton made up not less than 35.000 AMD. From January of the current year, the excise tax for diesel fuel is 13 thousand AMD per ton, i.e. decrease has been observed in this regard, but at the same time, the import and sale of diesel fuel is subject to VAT taxation. With this amendment, the legislative body has “brought” a diesel fuel price increase of 60 AMD.
With the same mechanism, the new Tax Code adopted by the government has “brought” a price increase in lubricants and many other products.
The aforementioned arguments indicate that the government has not “brought price increase from home”. Rather, it has “brought” tax increases, which, in turn, have led to price increases.
It should be noted that during the period of 2016-2017, prices for a number of food products have also gone up. Thus, the price for butter grew by 41%, tomatoes – 31%, potatoes – 28%, vegetables – 113%, and etc. You can see the complete list here, and you can read about the unjustified price of butter here.
