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Excise taxes on drugs may cause surge in market, says importers' union chief
10:20 * 28.07.14
Tert.am has talked to Samvel Zakaryan, the president of Medicine
Producers and Importers' Union, over the impact of a government
decision to impose excise taxes on the purchase of drugs.
Do you think the government measures in the pharmaceutical industry
are justified given that this is a priority sector?
They are justified; we would simply expect more active measures. In
terms of the strategy timing, our sector is the best. and it of the
first in terms of the activities accomplished. We are very actively
working with the Ministry of Economy and the Industrial Development
Foundation. The result was that the pharmaceutical sector had the
highest records, with 29.8 percent production growth and 25.8 percent
export growth.
Do you observe changes in the new government or do they pursue the
predecessors' [policies]?
No, it is an absolutely different work style. What particularly
surprised us was that the reforms are implemented without any
discussions with us, with our opinion remaining overlooked. For
instance, the document on approving simultaneous import procedures was
put forward to the private sector all of a sudden.
What will you say about the new reforms that call for imposing excise
taxes on medicines?
That's the other problem we face; the [amended] law "On Trade and
Services" envisages excises taxes also for medicines, apart from soap,
make-up products and other items. That's a non-professional approach,
because drugs, as a specific form of product, should [be imported]
based on specific procedures. As a result, drugs too appeared on that
list on grounds of combating the shadow economy. Over one million drug
packages, with different sizes and quality, are imported to Armenia,
so it is important to excise all that, as we deal with considerable
expenses. If the package includes 60 pills while the patient wishes
five, for example, that would violate the excising procedures. Our
patients will not buy all 60; they will take 5 [pills] and throw away
all the rest. The excise tax costs may cause a surge in the prices of
medicines.
It is argued to be a method of combating the shadow.
The excision will offer no benefits at all; it doesn't make any sense
in the case of medicines. There are special surveillance procedures
for pharmaceutical products, as it is, with every single vial being
registered during the import. So shadow activities are practically
ruled out. If drugs used to be smuggled from Georgia, then it is
necessary to take action against that; official importers cannot carry
out a shadow import. Excise offers wide opportunities to smugglers;
they may tear the label from a drug sold for 10 Drams and stick to a
10,000 Drams worth drug imported without registration. Official
importers work in a coordinated manner, so they cannot act in the
shadow. It is necessary to fight smugglers instead of dismantling the
accomplished market through experiments. There are no procedures of
the kind in European countries.
http://www.tert.am/en/news/2014/07/28/samvel-zaqarian/
From: A. Papazian
10:20 * 28.07.14
Tert.am has talked to Samvel Zakaryan, the president of Medicine
Producers and Importers' Union, over the impact of a government
decision to impose excise taxes on the purchase of drugs.
Do you think the government measures in the pharmaceutical industry
are justified given that this is a priority sector?
They are justified; we would simply expect more active measures. In
terms of the strategy timing, our sector is the best. and it of the
first in terms of the activities accomplished. We are very actively
working with the Ministry of Economy and the Industrial Development
Foundation. The result was that the pharmaceutical sector had the
highest records, with 29.8 percent production growth and 25.8 percent
export growth.
Do you observe changes in the new government or do they pursue the
predecessors' [policies]?
No, it is an absolutely different work style. What particularly
surprised us was that the reforms are implemented without any
discussions with us, with our opinion remaining overlooked. For
instance, the document on approving simultaneous import procedures was
put forward to the private sector all of a sudden.
What will you say about the new reforms that call for imposing excise
taxes on medicines?
That's the other problem we face; the [amended] law "On Trade and
Services" envisages excises taxes also for medicines, apart from soap,
make-up products and other items. That's a non-professional approach,
because drugs, as a specific form of product, should [be imported]
based on specific procedures. As a result, drugs too appeared on that
list on grounds of combating the shadow economy. Over one million drug
packages, with different sizes and quality, are imported to Armenia,
so it is important to excise all that, as we deal with considerable
expenses. If the package includes 60 pills while the patient wishes
five, for example, that would violate the excising procedures. Our
patients will not buy all 60; they will take 5 [pills] and throw away
all the rest. The excise tax costs may cause a surge in the prices of
medicines.
It is argued to be a method of combating the shadow.
The excision will offer no benefits at all; it doesn't make any sense
in the case of medicines. There are special surveillance procedures
for pharmaceutical products, as it is, with every single vial being
registered during the import. So shadow activities are practically
ruled out. If drugs used to be smuggled from Georgia, then it is
necessary to take action against that; official importers cannot carry
out a shadow import. Excise offers wide opportunities to smugglers;
they may tear the label from a drug sold for 10 Drams and stick to a
10,000 Drams worth drug imported without registration. Official
importers work in a coordinated manner, so they cannot act in the
shadow. It is necessary to fight smugglers instead of dismantling the
accomplished market through experiments. There are no procedures of
the kind in European countries.
http://www.tert.am/en/news/2014/07/28/samvel-zaqarian/
From: A. Papazian