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February 28, 2009 Tax and Customs Legislation and Bureaucratic Red Tape Are Obstructing the Development of Book Publishing
Yerevan—Today, the National Citizens’ Initiative (NCI) hosted an off-the-record panel discussion between several publishing house directors and members of the Armenian National Assembly. The meeting also brought together economy specialists from the parliament, the Armenian Center for National and International Studies (ACNIS), and media representatives. Welcoming the audience with opening remarks, the moderator of the discussion remarked that as a result of the incorrect tax policies and the fixed customs laws, the printing and publishing of books has become extremely difficult in Armenia and that this domain cannot compete with its foreign counterpart. “In the meantime, numerous countries encourage the publishing of books in their national language,” the moderator said. “And this deals a heavy blow first and foremost to the development of innovation products and does not satisfy the spiritual needs of the Armenian reader.” According to the moderator, the fact that solely four small bookstores have remained open in Yerevan speaks for itself, and at least three have shut their doors in the most recent years. In their interventions, the book publishers and printers pointed to all the impediments standing in the way of Armenian publishing. For example, a twenty-percent value added tax (VAT) is imposed on imported paper, whereas the ready-products—such as notebooks—are exempt from the VAT. In view of the discussants, this line of attack seems to be a simple imitation of Russia, which aims to obstruct the paper import from Finland and Poland to develop its domestic paper production. But does Armenia have enough forests to produce its own paper? According to the roundtable participants, this procedure is carried out so that certain businesses that import notebooks can be exempt from taxes and in result the Armenian-made notebooks cannot compete, even in the domestic market. As noted by the panel discussants, the other problem is the law which sets out a VAT postponement for imported products whose value exceeds 300 million Armenian drams. This legislation artificially has put the large, medium-size, and small importers on an unequal playing field and thus allows the large importers to resell their imported printing presses to small and medium-size businesses for a higher price. In addition, the law must also work backwards so that the businesses which already had imported such machinery in 2008 would not find themselves in unequal conditions with this year’s importers. As noted by the discussion participants, the customs “terror” truly has become a calamity for the Armenian business sector. And this “terror” is unleashed by certain bureaucrats and on the instruction of, or silent accordance by, the authorities. The matter in particular is the short-term “law and order” that was set out in Armenian customs from May to July 2008. This had given hope to many that the authorities really wished to carry out their pre-election promises, but the people were deeply disappointed as everything went back to “normal” very quickly. The discussants also noted that by not honoring the invoices and certificates guaranteed by the distinguished bodies of the European Union countries, the Armenian customs officers arbitrarily determine the market value of the imported products and in result, instead of the twenty percent, the businesses in fact pay up to sixty-percent VAT. The attendees also examined the consequences of such a shameful situation. They underscored that numerous Armenian publishers are compelled to print their product abroad and thus creating and maintaining many jobs in other countries. And this, according to the discussants, either is the result of certain officials’ absurd and distorted notion of liberty, or, more probably, depends on their petty self-interests, which shortly will result in the ultimate demise of book publishing in Armenia. In the common view of the panel participants, it is necessary to take immediate measures toward saving this domain. And this does not mean creating new jobs but, instead, not losing the already existing ones. “Today, our publishers are capable of producing the highest quality books and monthlies, selling them in Armenia at fairly affordable prices, and also exporting these products. And the only thing necessary is some attention from the state apparatus, a state vision, and a basic desire to encourage the local producer,” the discussants concluded.
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