EaP GREEN: Use of taxes on environmentally harmful products in Armenia

USE OF ENVIRONMENTALLY-RELATED TAXES ON

ENVIRONMENTALLY-HARMFUL PRODUCTS IN ARMENIA

Kh. HakobyanMinistry of Nature Protection

of the Republic of ArmeniaParis, 2014

Economic instruments framework is in place in Armenia under the Law on Environmentally-Related and Natural Resource Use Charges and respective regulations, which aims to:

reduce adverse environmental impact

ensure efficient/sustainable use of natural resources

attract environmental investment

replenish state budget

• The economic instruments framework increased revenues of the state budget and in some cases reduced the environmental pollution load.

• Within the framework of establishment and strengthening of mechanisms to raise and allocate funds to achieve environmental objectives, Armenia has very effective economic instruments, including environmentally-related and natural resource use charges.

• Over the past 15 years, proceeds from the charges increased almost 55-fold, of which in 2013, about AMD 32.9 bn was collected, which is equivalent to USD 80.0 mln or EUR 60.0 mln.

Law of the Republic of Armenia on Environmental and Natural Resource Use Charges provides for the following types of charges:

1.Natural resource use charges:

• Water use fee

• Fee for extracted mineral resources

• Fee for use of bioresources

• Royalty for extracted metal mineral resources and sale of products obtained as a result of their processing

2. Environmentally-related charges

• Environmental pollution charges (for air emissions and discharges into waters)

• Charges for disposal of industrial and municipal waste

• Charges for environmentally-harmful products

Enironmentally-related and natural resource use charges as a share of GDP, percent

Dynamics for state budget revenue from enironmentally-related and natural resource use charges, 2006-2013, in billions of AMD

Natural resource use chargesEnvironmentally-related chargesCollected, total

Effective 1 January 1999, charges for domestic and imported environmentally-harmful products were introduced (charge rates were increased in the same year).

Product-related charges – designed as a source of revenue rather than as incentive instruments – currently cover 29 product categories, but the list of product categories subject to charges has changed since 1999.

Environmentally-related charges for air emissions from mobile and stationary sources

Environmentally-related charges for production and import of environmentally-harmful products

Environmentally-related charges for discharges into water bodies

Environmentally-related charges for disposal of industrial and municipal waste

Breakdown of Environmentally-Related Charges in 2013

Dynamics for state budget revenue from environmentally-related charges for production and import of environmentally-

harmful products, in millions of AMD

Charges for use of environmentally harmful products, % of price

Item Rate

Imported Produced and sold in Armenia

Mineral oils, oil and oil products, bitumen and asphalt

2.0 2.0

Electroinsulating oils, used oil products 3.0 3.0

Freons 2.0 2.0

Halons 2.0 2.0

Printing ink 3.0 3.0

Detergents 0.5 0.5

Film 0.8 0.8

Brake fluids 2.0 2.0

Antifreeze fluids 2.0 2.0

Plastic products used to package and transport goods (tanks, containers, etc.)

2.0 2.0

Tyres 1.0 1.0

Rubber air chambers 1.0 1.0

Products made of asbestos, friction substances 3.0 3.0

Glass fibre 0.8 0.8

Lead and lead products 3.0 3.0

Electrodes 1.5 1.5

Motor oil or fuel filters 1.0 1.0

Primary batteries 1.5 1.5

Lead batteries 3.0 3.0

Nickel-cadmium batteries 2.0 2.0

Battery parts 1.5 1.5

Electrolytic condensers 3.0 3.0

Light bulbs with thermal cathodes 3.0 3.0

Mercury vapour bulbs 3.0 3.0

Motor vehicles 5 to 10 years old 2,0 x

Motor vehicles 10 to 15 years old 10.0 x

Motor vehicles 15 or more years old 20.0 x

THANK YOU