Armenian SMEs will have to choose from two options of paying turnover tax

YEREVAN, March 2. / ARKA /. Small and medium-sized companies in Armenia will be allowed to choose one of two options to pay their turnover tax, Mkrtich Minasyan, an MP from the ruling Republican Party of Armenia, told reporters today after the parliament continued debates on a set of changes to the law on turnover tax which propose that turnover tax be levied from businesses with annual sales of up to 113.4 million drams, up from 58.35 million set by the current law.

The turnover tax was earlier lowered by the government from 3.5 percent to 1 percent for small companies with annual sales of up to 58 million drams, but the amended law obligated the small business owners to provide tax authorities with documentary evidence of their wholesale purchases made from larger firms or face heavy fines. 

The new law was to come into force on February 5 but after protests the government postponed its enforcement until July 1. 

According to Minasyan, the latest changes set a 5% turnover tax for companies with annual sales of up to 113.4 million drams, which will refuse to provide documentary evidence of their wholesale purchase. Those that will provide it will pay a 1 percent tax. 

According to the Union of Armenian Employers, there are about 70,000 SMEs in the country, of which 58,000 are micro and small enterprises, 10,000 are medium companies. Together they account for 43% of Armenia’s GDP and 5 percent of tax revenues.  ($1 – 478.6 drams). .-0-