YEREVAN, FEBRUARY 28, ARMENPRESS. The Armenian government wants to introduce an excise tax on all types of soft drinks.

According to officials, the additional tax collection will to some extent solve the budget loss problem that will be caused by the reduction of revenue tax rates and other reforms. Officials also argue that the move will also have a positive healthcare impact.

Deputy Minister of Finance Arman Poghosyan told ARMENPRESS they first considered introducing the excise tax only on soft drinks that contain 5g or more sugar per 100gram of the ingredient.

“Our initial recommendation was this, it was later revised. Now, an amended bill suggests an excise tax on all carbonated beverages, excluding mineral [soda] water and alcoholic drinks, regardless of sugar level. Our observations showed that tax administration based on sugar level can be accompanied by certain difficulties because the labels of the drinks rarely include sugar level, while carbonation is a more visible and more controllable element and tax administration can be implemented more effectively,” he said.

Asked to elaborate on the goals of the bill, Poghosyan says on one hand its purpose is to provide additional tax revenue, and on the other hand it will limit ‘harmful consumption’. The deputy finance minister says carbonated drinks and beverages with high sugar levels are bad for health.

According to Poghosyan, they conducted detailed discussions with the healthcare ministry and the World Health Organization while drafting the bill. He said they suggest having a fixed excise tax rate for all excisable soft drinks.

It wasn’t immediately clear how the excise tax will impact the market prices of soft drinks in Armenia.

The government is also currently developing a new tax code.  

Timeframes of commencing the new initiative weren't immediately clear. 

By Anna Grigoryan

Edited and translated by Stepan Kocharyan