Customers are worried that products prices may rise after the illegal activities of the Yerevan City supermarket network was exposed
The National Security Service of Armenia has been exposing the illegal activities of large enterprises such as Yerevan City, one of the largest supermarket chains in the country who has been evading tax payments for years.
The network is part of the Alex Holding company which belongs to Samvel Aleksanyan, a businessman within the circle of the former Armenian authorities. He was elected as a member of the Republican Party, led by Serzh Sargsyan, the former President of Armenia.
In order to evade taxes, a criminal scheme was developed, involving fake individual enterprises created under the names of hundreds of citizens.
According to the National Security Service, an agreement was concluded with the former leadership of the State Revenue Committee: supermarket products were purchased from farmers and then sold through these fake individual enterprises. The sales threshold of products sold by these enterprises is limited, which allowed them to pay a turnover tax of 2% instead of 20% VAT (value added tax) and income tax.
According to preliminary calculations, the total turnover of the 461 fake enterprises amounted to over 40 billion drams, of which only 2% in tax was paid instead of 20% if Alex Holdings acted within the law.
And all this was done under the pretext of avoiding an increase in prices for local agricultural products.
It is still unclear whether local agricultural products will become more expensive now that Alex Holdings has been exposed. Buyers are concerned that prices for local vegetables and fruits may rise.
Economists say that Yerevan City supermarkets monopolized the market and acted from a position of dictating prices. In this regard, they consider a rise in prices possible. However, Arthur Khachatryan, the newly appointed Minister of Agriculture, said that Yerevan City is not the only company engaged in this activity and so prices will be determined by the market.