Tax deductions from the Eurasian Economic Union: Armenia will be able to purchase goods at low customs duty rates for another year
Armenia once again received tax deductions from the EAEU, of which they have been a member since 2015. Starting January 1 2020, they planned to increase import custom duty rates on more than 700 goods from countries that are not members of the Eurasian Economic Union.
The Eurasian Economic Union operates under the leadership of Russia and includes Armenia, Belarus, Kazakhstan and Kyrgyzstan. The organization provides its members with freedom of movement of labor, goods, services and capital. Having become a member of the EAEU, Armenia automatically also became part of the Customs Union of this organization.
Back in 2015, they decided to equalize customs duty rates in all countries of the Eurasian Economic Union in order to form a single market and give priority to the goods of partner countries. Due to the increase in customs duties, an automatic increase in prices for goods imported from outside the EAEU was expected. Armenia was given five years to adapt its economy to the changes and mitigate their negative impact. In 2020, the grace period is expiring. But now, they have been given another year to comply.
Until the end of 2020, Armenia will be able to take advantage of low customs duties. Thanks to this, the country will save $30 million in customs duties.
The tax breaks will apply to 647 different kinds of goods. These include meat, oil, medicines and the raw materials needed to produce them. For example, the customs duty on oil will remain at a rate of 10 percent, instead of the “Eurasian” 15 percent, until the end of 2020.
The deductions will not apply to cars. Since January 1, 2020, import duties on cars in Armenia have increased several times and are equal to those existing in other EAEU countries. Nevertheless, experts do not expect that all residents of Armenia will now prefer the Russian Lada to German BMWs. They think that the price is not the only factor, and definitely not a decisive one for those considering buying a car.