Friday, March 7 2014

 Armenia has no plans to reduce the limit of tax-free import of packages in the country for privates from the current 150,000 drams (nearly $360 at the current exchange rate), the Finance Ministry told ArmInfo.

The limit of tax-free import in Russia is to be reduced over six-fold to 150 EUR per package instead of the current 1000 EUR. "Even if Russia reduces this limit, we will leave it unchanged," the Ministry said.  In conformity with the Customs Code of Armenia, privates can receive tax-free packages worth up to 150,000 drams and weighting up to 20kg within at least 180 days. In line with the legislation of the Customs Union, courier packages worth $1000 and weighting 31kg delivered to privates with no limitations of the shipment period.

At first sight, the express-delivery terms in the Customs Union are more liberal. It is not clear if Russia will reduce the tax-free import limit.

Online trading is gathering pace both in Russia and Armenia, as goods in online stores are often of higher quality and even cheaper than in the local markets, even inclusive of the shipment fee. In this light, the not so developed countries that fail to stand international competition try to make restrictions and close their markets. Armenia like Russia has actually closed the door-to-door courier delivery services for privates.  DHL Express and FedEx have not been providing delivery services to privates for several years already.  This issue is under discussion now and the Russian authorities are ready to allow all the express-delivery companies to register international online purchases through facilitated procedures.  The restrictions were introduced in Nov 2012. In fact, a private is reluctant to pay at least 4,000 drams for registration of a package of documents to receive a delivery irrespective of the customs cost of the package.  The situation is absurd. For instance, if a private orders a package worth $1 via DHL Express or FedEx, he will have to pay the above fee (4,000 drams). These funds are not directed to the state budget of Armenia. 
The courier companies charge these funds to pay for customs storage of goods. If a package is left in the storage longer than 48 hours, the recipient will have to pay 6,000 drams and more depending on the period of storage. The citizens of Armenia are required to submit copies of their passports and pay for registration of documents to get a package from the express delivery service. ArmInfo's correspondent applied to the Ministry of Transport and Communication Press Service for comments, where he was recommended to address written questions, as they do not give 'live' interviews.

The customs cost of a package is estimated differently in Armenia. The limit is 150,000 drams. It was increased from the previous 50,000 drams. The point is that the Customs Service of Armenia has its own price-list (approximate tariffs) allegedly based on the local market prices. The list has nothing in common with the cost of goods in invoices. Only the customs officers are familiar with the price list. It is not published anywhere. Neither the list is shown to citizens, who never know if their packages and freights are subject to customs registration or not.

In other words, if you have purchased a used iPhone for $260 or a netbook for $300 on ebay, you will not avoid customs clearance.  In line with the approximate price list of the Customs Service, it may turn out that the phone you have ordered costs $900 in Armenia and the netbook costs $1000 and you will have to pay additional 32% of the cost. As a result, the ordered goods may turn much more expensive than they are sold in Armenia. This hits the pockets of ordinary citizens and creates additional corruption risks. The interests of the country run contrary to the interests of the citizens, as the government tries to fill the treasury and make the people buy goods only in the local market, which is also connected with their fiscal expectations.