State Revenue Committee to conduct research in case of increase of prices by supermarkets

The State Revenue Committee (SRC) has no function over the pricing, SRC Chairman Davit Ananyan told reporters after today’s Cabinet session.

Asked whether the Yerevan City and the remaining supermarkets may start the practice of paying the Value Added Tax, and whether in that case the prices will drastically increase, the SRC Chairman stated: “I have also heard similar assessments. Vahram Baghdasaryan [head of the RPA faction] has also stated that previously some agreements were reached to avoid that so that there wouldn’t be 50-60% increase in prices. But the problem is very simple: if we state that the economic entities should operate within the law, it means that the supermarket selling agricultural and meat products should pay its tax with its full volume”.

He said if there is a 50-60% increase in prices in case of coming to the legal field, it would mean that the remaining small shops will be more competitive within the turnover tax.

“Supermarkets once thought that they should compete also with the small and medium businesses in their neighborhood, by this ignoring the scale effect. It is not so. We, as a State Revenue Committee, think that if prices increase, we will just conduct research to be convinced on to what extent the price increase is justified or credible. If it turns out that the transition to such tax field can cause such pricing, we didn’t see any problem. The SRC should have nothing to do with any process linked with pricing. If we work exclusively within the law and see that it causes problems and there is a need to revise the law, we can cooperate with the finance ministry by such proposals in order to change the legislation. As long as the law is in action, be it good or bad, all have to operate within that law”, Davit Ananyan said.