Armenian premier finds small and medium entrepreneurs’ anxiety about amendments to turnover tax law groundless

YEREVAN, September 25. /ARKA/. Small and medium entrepreneurs’ anxiety about the amendments to the turnover tax law that will take force on October 1 is irrelevant and groundless, Armenian Prime Minister Hovik Abrahamyan said Thursday at a regular Cabinet meeting. 

Turnover tax rate for economic entities is planned to be lowered from 3.5% to 1% on October 1, 2014, but particular paperwork will be made obligatory for small and mid-scale businesses. Along with that, the inspections of compliance with the demand will be facilitated. 

In recent days, several hundred SME representatives gathered outside the government building in a protest against the government-proposed legislative change. 

“Yesterday I met with SME representatives and I want to say that their anxiety is irrelevant and groundless,” he said. “The government doesn’t want to put pressure on small and mid-scale businesses. Exactly the opposite – the aim of this package is to promote them. We can’t endure that large entrepreneurs use them as an instrument for dodging taxes.”

Abrahamyan instructed the finance ministry’s agencies to refrain from unjustified inspections that may affect SME development.  

“Our target is large businesses,” he said. “Of course, there are instigators who are trying to put about a rumor that the government intends to suffocate small and medium businesses.”

The premier stressed that the government will keep pursuing its initial policy that doesn’t consider small and medium enterprises as taxpayers and will make whatever necessary to leave large entrepreneurs with no room for evading taxes. 

Deputy Finance Minister Vakhtang Mirumyan said in this connection that the ministry couldn’t understand why SME entities fell into anxiety over the amendments and pointed out the considerable tax relief implied for them in the amendments as evidence of the government’s effort to ease their tax burden. 

“The turnover tax rate for trade companies is lowered from 3.5% to 1%, and this is an unprecedented tax relief for small and medium entrepreneurs, and in return, the government obliges them to make particular paperwork,” he said. 

This provision, he said, is not designed for oppressing small and medium businesses or for applying administrative resources against them – it will be used for controlling large businesses properly. 

Mirumyan said the amendments will enable the government to concentrate its attention on large businesses. 

He also stressed that the changes don’t imply unjustified interference in SMEs’ activities, excluding those cases when economic entities defy the demand. ---0---