Armenia collects a 20 percent tax from cars imported from Russia and other members of the Eurasian Economic Union (EEU) in breach of trade rules set by the Russian-led bloc, a senior EEU official said on Monday.
Tatyana Valovaya of the Eurasian Economic Commission, the bloc’s Moscow-based executive body, said Yerevan should have abolished value-added tax (VAT) for such cars when it formally joined the EEU in January 2015.
“The [founding] EEU treaty stipulates that the member states cannot use non-tariff protectionist barriers against each other. Nevertheless, we detect such barriers quite often,” Valovaya told reporters in a video conference from Moscow.
“There was such a barrier [for EEU car imports] in Kazakhstan and it was eliminated,” she said. “We have now found a similar barrier in Armenia.”
The Armenian Finance Ministry declined to comment on Valovaya’s claim or explain why VAT is still applied to EEU car imports.
Under Armenian law, companies or private individuals have to pay VAT, in addition to a 10 percent import duty, when they import vehicles from non-EEU states. The Armenian customs service also levies an environmental tax from second-hand cars manufactured 5 or more years ago.
Poghos Oghlukian, a self-employed car importer, claimed that the environmental tax rate is set much higher for vehicles imported from EEU states than other parts of the world, notably neighboring Georgia. This, he said, means that he now has to pay virtually the same amount of taxes for 10-year-old cars purchased in Georgia and Russia.
“Why did we join that union?” Oghlukian told RFE/RL’s Armenian service (Azatutyun.am). “In order to make some things easier here. But as things stand now, I’m better off importing cars from Georgia than taking a much longer trip to Russia”
Tigran Hovannisian, the chairman of the Armenian Union of Car Importers, also complained against the continuing collection of VAT from cars manufactured in Russia, Belarus and Kazakhstan. “It means they deceive us,” he said, referring to the Armenian government.