EXPERT CRITICIZES CHANGES TO TURNOVER TAX
YEREVAN, March 9. / ARKA /. Harutyun Mesrobyan, a management expert,
has criticized today a set of changes to the law on turnover tax, which
allow small and medium-sized companies to choose one of the two options
to pay their turnover tax, saying the law benefits only oligarchs.
The changes in question propose that turnover tax be levied from
businesses with annual sales of up to 113.4 million drams, up from
58.35 million set by the current law.
The turnover tax was earlier lowered by the government from 3.5
percent to 1 percent for small companies with annual sales of up to
58 million drams, but the amended law obligated the small business
owners to provide tax authorities with documentary evidence of their
wholesale purchases made from larger firms or face heavy fines.
The new law was to come into force on February 5 but after protests
the government postponed its enforcement until July 1. The latest
changes set a 5% turnover tax for companies with annual sales of
up to 113.4 million drams, which will refuse to provide documentary
evidence of their wholesale purchase. Those that will provide it will
pay a 1 percent tax.
Speaking at a news conference Mesrobyan said the proposed changes
passed by the parliament in the first reading are ridiculous,
‘because the oligarchic economic system in Armenia makes all laws
increases the tax burden on medium and small businesses.’
According to him, ‘normal’ oligarchs, who usually have close
connections with all the branches of power, do everything to make
laws serve their narrow interests.
According to the Union of Armenian Employers, there are about 70,000
SMEs in the country, of which 58,000 are micro and small enterprises,
10,000 are medium companies. Together they account for 43% of Armenia’s
GDP and 5 percent of tax revenues. -0-