NGO head says proposed changes to vat law would have devastating effect on SME

NGO head says proposed changes to vat law would have devastating effect on SME

YEREVAN, April 30. / ARKA /. Hakob Hakobyan, the head of an Armenian non-governmental organization called Association for Cooperation, argued today that the government’s plans to make some changes to the law on VAT would have devastating effect on small and medium-sized business.

The State Revenue Committee is considering now some changes to the law in question proposing to cut sale taxes for small and medium-sized enterprises with an annual turnover of up to 58.35 million drams from the current 3.5% to 1%. 

At the same time the proposed changes set tighter control over the activities of SMEs, requiring, particularly, that they have invoices and other documents for the entire range of products.

According to Hakob Hakobyan, invoices and other relating documents are to be provided by suppliers of goods, but very often they themselves do not have them.

According to the proposed changes, those SMEs which fail to provide proper documentation for all the products will have to pay the VAT for two years, the size of which is 20%. "Thus, they would appear  under even greater tax burden,” Hakobyan said.

The head of the Union of Merchants, Ms. Tsolvard Gevorgyan, argued that the government should either bring back the law on simplified tax, which was adopted in 2000 or exempt SMEs from all taxes, ‘because it would  dramatically  strengthen this sector and  reduce the exodus of labor migrants.”

Hakob Hakobyan and Tsolvard Gevorgyan told a news conference they had already sent a letter to prime minister Hovik Abrahamyan requesting that before sending the bill to parliament the government organize extensive debates over the proposed changes with all stakeholders.-0-

16:44 30.04.2014

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