Ombudsman’s office says SME must be allowed to choose sales tax payment option

YEREVAN, October 2. / ARKA /. The best way to calm the anger of Armenian small and medium-sized businesses caused by the enforcement of a controversial law on sales tax is to allow these entities to choose between the previous and new forms of payment of this tax, Anush Margaryan, an adviser to Armenian human rights defender, told ARKA Thursday outside the Armenian government building in downtown Yerevan where representatives of small businesses protested against the government decision.

Under the law effective from October 1, a single turnover tax for small firms and individual entrepreneurs with annual revenues not exceeding 58 million drams ($140,000) was cut from 3.5 percent to 1 percent. The law also obligates these businesses to provide tax authorities with documentary evidence of all of their transactions with suppliers. The failure to do so entails large fines. 

The government says the law is designed to combat tax evasion by importers of goods, but representatives of SME say complying with law is actually impossible because wholesale traders refuse to issue receipts to them.

According to Ms. Margaryan, the draft law on sales text had not been sent to the office of the human rights defender in violation of the presidential decree that draft laws relating to human rights, should be sent to the human rights defender’s office for examination. 

Earlier this week the parliamentary majority represented by the ruling Republican Party of Armenia boycotted an extraordinary session initiated by the minority parties to discuss the latter’s bill calling for delaying the enforcement of the controversial law. -0-