Armenian Finance Ministry rejects SME representatives' accusations of tougher tax burden
YEREVAN, February 5. /ARKA/. Armenia's Deputy Finance Minister Arman Poghosyan declined today allegations that the latest changes to the Tax Code have only increased tax burden on several categories of business entities.
Representatives of small and medium-sized businesses have held several protests in front of the government building this year against the changes in the Tax Code, which envision an increase in the turnover tax rate from 5% to 10%.
“Simply, the taxation system has been revised, which allows reducing the turnover tax. The rate of sales turnover has been also revised upward. However, in parallel, opportunities are provided to entities paying turnover tax to document their expenses and reduce the tax from 1.5% to 1%,” Poghosyan said during a press briefing on Wednesday.
The deputy minister also said that the tax burden may eventually decrease for the said category of taxpayers.
Poghosyan said that the draft law envisioning the revision of turnover tax rates had been discussed in detail on all possible platforms and adopted by the National Assembly. A 6-month period was then given to business entities before it came into force.
He said periodic meetings were held with representatives of business entities, various groups, associations representing the interests of entrepreneurs, and their concerns were raised in a constructive atmosphere.
“We invited them to submit a collective letter of questions to us so that we could respond promptly. At present, we see no valid argument or reason to reconsider this legislative change,” Poghosyan noted.
According to the amendments that took effect on January 1, 2025, SMEs with an annual turnover of less than 115 million drams are required to pay a 10% turnover tax if their goods or services are not documented. If they are documented, the tax rate is reduced from 1.5% to 1% of turnover.
Experts and business representatives have come to a unanimous conclusion: these changes will only lead to an increase in the cost of services (such as accountants, lawyers, and certain other categories) by up to 40%, and this burden will fall directly on the shoulders of citizens.-0-
