Persons who import cars for personal use from other countries, (mostly from Georgia) to Armenia are discontent with the new government-supported legislative initiative according to which individuals would not be allowed to register their vehicles as a temporary import.

Deputy Chairman of the State Income Committee Armen Alaverdyan introduced the initiative during the most recent government session pointing out that 32,000 cars were registered as temporary import within the first seven months of 2009, this year that number has reached 44,000. Car owners prefer to register their vehicles as “temporary import” as a way to avoid customs clearance payments.

Armenian law stipulates that a vehicle must be cleared through customs within 10 days of entering the country and pay a tax equivalent to 32 percent of the vehicle’s value. If, however, the vehicle is registered as “temporary” there is no tax and it is allowed in the country for 30 days. Some have used the loophole in the law to keep cars here indefinitely, driving them across the nearby Georgian border and back every 30 days and renewing “temporary” status.

Ruben Abrahamyan, 33, is among those who put up with the inconvenience of the monthly drive, for sake of avoiding the heavy tax. He bought a car in Georgia three years ago for $3,000, but claims that the book value of it in Armenia is $4,500, meaning that he should pay a tax half as the amount he paid for the car.

“If this law is enforced it will first of all harm the middle class,” Abrahamyan told ArmeniaNow. “What they should do is lower the customs payments and apply that law only to the imported cars within the price range of $80,000-150,000, making their import legal,” Abrahamyan told ArmeniaNow.

The reform was approved by the Armenian government and will be discussed in the National Assembly.