New income tax may cut real wages amount in Armenia-press digest

YEREVAN, September 5. /ARKA/. The new income tax in Armenia may cut the amount of real wages, according to the article published in Hayots Ashkharh newspaper (Armenian World) on Wednesday. 

Businessmen have already expressed their concerns around the new income tax law that will be enforced on 1 January, the article says. Some market participants are currently applying to some measures to avoid the additional expenses that may arise after the new income tax is introduced. Particularly, they are going to reduce the salary of workers before 1 January, so as to evade financial losses in the case they are obliged to increase salaries after the law enforcement. According to the newspaper, some companies have already informed their employees in a written form that the amount of their wages might be changed within the next two months.

“Even though the new income tax is said to just bring together two or three related taxes, reduce the tax duties and overload of the entities as well as to simplify terms and conditions, it is not really so ideal as described. Moreover, the new income tax will impose the entities with the additional tax obligations,” the article says.

The newspaper informs that a several months later after the law had been adopted, it became clear that the new income tax will directly impact the amount of real salaries. If an employer doesn’t increase salaries, workers will actually get lower incomes. That is why it was decided that all employers will be obliged to raise the amount of salaries for their workers. Even though the text of the law doesn’t refer to this action. Thus, this requirement is not actually regulated in reality, according to the source.

Earlier Minister of Labor and Social Affairs Artem Asatryan clarified that from 1 January 2013, all employers will be obliged to increase the salaries of their workers so as they can have the same salary as before introduction of the new income tax law.

According to him, the law will have mechanisms controlling the situation mentioned above.

“There have been a lot of speculations recently that the income of workers will fall after the new law will be enforced. I want to ensure you that it is not like that,” he said. —0-