ArmInfo. Armenia is set to overhaul its excise tax rates following the government's approval of amendments to the state tax code during a session on June 11.
According to the draft resolution's explanatory note, the bill proposes indexing excise tax rates on regulated goods in line with projected inflation over the coming years, establishing an annual indexation coefficient of 3%. Furthermore, the amendments mandate substantial, targeted hikes for tobacco and nicotine products: Traditional tobacco products: Excise rates will increase by 7% annually. Heated tobacco products (HTPs): Rates will rise by 30% annually. E-cigarettes (vapes): Rates will surge by 100% in the first year, followed by subsequent annual increases of 25% and 20% over the next two years. Hookah/shisha tobacco: Rates will increase by 40% in the first year, followed by a 30% annual increase over the subsequent two years.
The document also introduces a new excise tax on the manufacture of tobacco products classified under the FEACN (Foreign Economic Activity Commodity Nomenclature) code 2404 91 000. The initial rate will be set at 2,800 drams for the first year, increasing by 30% annually over the following two years.
To stimulate the production of fruit vodka, mitigate high manufacturing costs driven by raw material prices, and develop the local distilling sector, the current excise tax rate on fruit vodka will be slashed by 33%. For brandy production, a flat excise tax rate will be established at 4,000 drams per liter, regardless of the aging period.
Additionally, the provision for direct excise tax refunds will be abolished. Instead, necessary financial support for economic entities will be administered dynamically through standard state budgetary instruments.
