ARMENIAN GOVERNMENT PROPOSES NOT TO APPLY SIMPLIFIED TAXATION TO IMPORTERS

Noyan Tapan
Jun 22 2007

YEREVAN, JUNE 22, NOYAN TAPAN. At the June 21 sitting, the Armenian
government approved the bill on making amendments and additions to the
RA Law on Simplified Tax, which proposes that simplified tax not be
used in the main branches of the economy, and the scope of simplified
tax liable activities be considerably reduced. According to the bill,
simplified tax payers should not be allowed to have representative
offices or branches and import goods into Armenia.

By another decision, the government approved the bill on making
amendments and additions to the RA Law on Fixed Payments that
envisages to establish the new method of calculation and payment of
fixed payment to replace VAT and income tax for private businessmen
who conduct trade in kiosks (pavilions and other trade areas). The
bill also clarifies the provisions on relations between the organizers
of a trade point and those conducting trade there.

Deputy head of the RA State Tax Service Armen Alaverdian told reporters
after the sitting that the government proposes to impose fixed payments
on kiosks and pavilions of up to 7 square meters. The fixed payment
should make 1,815 drams per 1 square meter in Yerevan, 792 drams in
marz (province) centers, 660 drams – in marzes, 330 drams – in the
earthquake zone and border areas.

It was mentioned that with the aim of reducing corrution risks and
clarifying the business environment, it was envisaged the those
conducting trade were to be taxed in the same way as others in case
of exceeding the fixed payment’s amount of 310 thousand drams (about
898 USD) over 3 months.

However, according to A. Alaverdian, this amount lost its "urgency" so
the indicated level will be raised 3 times to make 1-1.1 million drams.

A. Alaverdian said that it is proposed to reduce the number of
simplified tax payers and impose this tax only on economic entities
conducting trade in one shop or kiosk. This tax will remain only for
small business. It is proposed not to apply simplified taxation to
importers and producers, except for economic entities providing some
types of services to the population.

Over 26 thousand economic entities are currently liable to simplified
tax.

The speaker said that it is envisaged to use this law from January
1, 2008.

Besides, the government will establish simple accountancy procedures
for economic entities with a turnover of up to 50 million drams,
simplifying the order of report presentation, as well as income and
expenditure calculation.

From: Emil Lazarian | Ararat NewsPress