YEREVAN, October 15. / ARKA /. The ratio of Armenian taxes to GDP in 2012 may grow to 21.4% -21.5% if the authorities take action to reduce the so-called ‘shadow economy", Vazgen Safarian, head of the Union of Domestic Commodity Producers, told a news conference today.
Under the 2012 budget, the share of taxes in the overall GDP is planned at 17.36%. The budget calls for 911.6 billion drams in revenue and 1044.1 trillion drams in spending. The projected deficit is 132.5 billion drams. The government has projected to collected 732 billion drams as taxes.
"Armenia has a tangible shadow economy, and the ratio of taxes to GDP this year is planned at 17.36%. Due to changes in the law "On Income Tax", the shadow economy is expected to drop a little and the ratio of taxes to GDP may reach 21.4-21.5%," Safarian said.
Safarian pointed out some difficulties that workers may encounter after entry into force of the law "On lIncome Tax;" particularly, it may give employers a possibility to dismiss their workers under the pretext of changing the activity of the company in order not to increase their wages.
Speaking of the relationship between direct and indirect taxes, he said that indirect taxes- the excise tax, VAT, customs duty make 65%, while direct taxes – income and profit taxes, which reflect the economic trends, range from 28 to 30%. The revised Law on Income Tax comes into force from January 1, 2013. -0-