NEW TAXATION PACKAGE PROVIDES FOR NEW INSTITUTES IN ARMENIA

ARKA
June 16, 2009

YEREVAN, June 16. /ARKA/. The new taxation package provides for
new institutes in Armenia, RA Prime Minister Tigran Sargsyan told
reporters.

"It is natural that the process of introducing the new institutions
should arouse concern," T. Sargsyan said. He pointed out that the
Armenian parliamentarians and the RA Government are discussing the
package.

Sargsyan said that some remarks made by parliamentarians gave rise
to qualitative changes.

As regards such issues as excise tax, advisability of storing
products, the Armenian Premier said that they are actively being
discussed because the management of the process can, in some cases,
be a serious obstacle to business development.

"All corruption risks have two aspects: if we admit tax administration
problems, we should also admit problems in business. Both sides’
interests must be taken into account," Sargsyan said.

The RA Premier also reported that the sides continue their discussions,
making rather ambitious proposals. It is yet early to speak of
submitting a revised package to the RA Parliament.

At the RA Parliament’s sitting on June 10 the Armenian Government
proposed postponing the vote on the controversial package of amendments
to the Armenian tax laws, particularly to the Code of Administrative
Offences, laws "On excise tax", "On taxes", On VAT", "On Profit tax".

The amendments reduce taxes for small-to-medium businesses and set
stricter tax administration requirements for big businessmen. The
package is based on the principle of separation of small, medium and
big business. Some of the amendments only deal with big business.

Specifically, the institution of permanent tax representative
immediately concerns big businesses with an annual turnover of more
than 4bln AMD having over 500 employees.

The intended amendments to the Armenian tax laws stirred heated debate
and discontent among the parliamentarians.