The VAT on Essential Goods in Armenia Will Decrease from 20% to 7%

The newspaper 'Hayastani Hanrapetutyun' reports: When addressing issues in the agriculture sector, we have previously noted that many developed countries apply relatively mild tax policies in the food sector (referring to preferential rates) to ensure that all segments of society have access to affordable food.

In order to ensure this affordability, as well as to increase the export volume and turnover of agro-food products, the Ministry of Economy of Armenia has decided to come up with a relevant proposal and has drafted a bill to amend and supplement the tax code. The focus is on the reduction of the value-added tax (VAT).

Experiences from Latvia and Finland have been considered. We attempted to obtain clarifications from Gevorg Ghazaryan, the head of the Food Security and Agro-Processing Development Department of the Ministry of Economy. Accordingly, the VAT is planned to be reduced from 20% to 7%. 'The list of product groups is not final yet, but we want to extend the VAT reduction to essential goods. This pertains, for example, to bread products, fish products, meat products, and vegetable oils,' the speaker stated.

Will the state budget be adversely affected by this sharp reduction...?

For more details, refer to today's issue of the newspaper.