New tax burden on restaurants to result in mass growth of prices

The turnover tax for restaurants has been raised by 2% from January 1, 2019, reaching 8%. The recent tax growth for the sector was registered few months ago in July 2018 when it became 6%. Besides, according to the Tax Code from January 1, 2020 it will become 10%.

The representatives of the sector claim that this growth will have its impact on the prices in restaurants.

Chairman of the State Revenue Committee Davit Ananyan met on January 8 with the representatives of the Union of Armenian Restaurants to discuss the situation.

Speaking to Aysor.am, coordinator of the Union Ashot Barseghyan said that the SRC shares their concerns as well.

“The problem is that it is already impossible to neutralize the impact of tax growth on prices on the account of the income. The representatives of the sector stated that in conditions of such tax burden the prices in restaurants will grow,” Barseghyan said.

He stressed that the additional tax burden in July shocked the sector while now in conditions of 8% it will be impossible to avoid its impact on prices.

He said they have thoroughly presented what impact it will have on economy, starting from jobs, services, quality of products, ending with impact on agricultural sector.

Barseghyan stressed as a result of the meeting with SRC chairman a decision has been made to organize meeting with the participation of representatives of SRC, Economic Development and Investments Ministry, Finance Ministry, acting PM and representatives of the Union.

“The finance ministry is of the opinion that we are getting super profit while the reality is that the inflation, raise in expenses, in salaries were not reflected on prices in restaurants. A situation is being created when we say that we do not want decline in sales, in country’s tourism attraction, we want to be competitive. Let’s with this end the experiments on this sector and understand what consequences it may have,” Barseghyan said.

According to initial arrangement, the meeting will take place by the end of this week.