Hundreds took to streets in Yerevan last week to join protests organised by the opposition Yelk Alliance against recent price hikes on food and fuel. The Yelk Alliance has attributed the rising prices to recent changes to the country’s tax code.
Protesters held signs reading ‘no to price hikes’ and ‘we demand price reductions’, according to Caucasian Knot, while the crowd chanted ‘reduction’.
The latest rally on 19 January went ahead peacefully, with the Yelk (way out) Alliance promising to hold another demonstration in early February. It was the latest in a series of protests against a new tax code, which came into force on 1 January 2018, including one by traders last year.
Armenian news site Hetq quoted a number of protesters as saying that ‘more fundamental changes’, such as the removal of the current government, are needed to solve the problem.
The demonstrators have called for others to join them in order to overturn changes adopted by the authorities.
According to Azatutyun, RFE/RL’s Armenian service, the price rises were caused ‘in part, by new tax legislation mandating higher excise duties on fuel, tobacco and alcohol’.
According to them, the cost of diesel, petrol, and liquefied natural gas, which is the most commonly used fuel for cars in Armenia, all rose by over 10% ‘immediately after it went into force’.
Caucasian Knot reported that work on the new tax code began in 2015, and has faced objections from opposition groups, who claim it will endanger the country’s economy. According to them, small and medium businesses also opposed the initiative.
Despite objections, the new tax code was adopted in October 2016, coming into force in 2018. Other changes in the reform included adjustments to income tax rates, with low income earners paying less while middle income earners will now pay more.
Employees earning less than ֏150,000 ($310) per month now pay income tax of 23%, down from 24.4%, while the rate for those earning ֏150,000–֏2,000,000 ($310–$4,200) has risen from 26% to 28%, according to JamNews. The rate for earnings over ֏2,000,000 has remained the same at 36%.
Some analysts have warned that the new tax code could result in more poverty.
A recent survey from CRRC Armenia showed that of those surveyed, the two most important issues were poverty and homelessness.
The Yelk Alliance, an opposition political party which has nine seats in Parliament after gaining 8% of votes in Parliamentary elections last year, has vowed to propose an alternative Tax Code for the country.