Government-proposed tax preferences for large exporters slammed by Armenian opposition

He explained that the dramatic drop in income taxes is for companies, which will have government-approved plan of actions to boost their exports up to at least 50 billion drams, which should be reflected in the companies’ accounts in resident Armenian banks. 

The preferences apply only to exported products, not those goods sold in Armenia’s territory. 

According to him, the bill is aimed at attracting fresh foreign investment, which should be used to boost Armenian exports. Mirumyan described the proposed change as ‘unprecedented.’ 

In his words, the two-percent tax would be an unprecedented incentive for exporters. 

“In fact, the government refuses tax revenues in order to stimulate producers and promote creation of new jobs and economic growth,” said Mirumyan. 

He also said that the proposed change provides for special regulatory measures to prevent attempts of companies to artificially reduce their tax payments. 

He said the change will not apply to Armenian mining companies. 

According to him, no company in Armenia meets now this requirement, ‘however, we are negotiating with some foreign investors that could be attracted by the proposed change'. 

The opposition factions, however, reacted angrily to the bill finding the deputy minister's arguments not convincing. 

Tevan Poghosyan, an MP from heritage opposition party, said the profit tax abatement from 20% to 2% for large exporters will give room for appearance of bogus companies that will enjoy this local tax preference. 

«As a result, Armenia may become a sort of offshore zone,» he said. Another opposition MP, Khachatur Kokobelyan, leader of the Free Democrats party, said it is unclear whom this reform targets. 

He said nobody disputes the significance of large companies' activities for Armenia's economy, but «a giant may seize completely one or another segment of the economy». Lawmakers from Armenian Revolutionary Federation/ Dashnaktsutyun, Orinats Yerkir party and the Armenian National Congress said they will vote against the bill since it doesn't solve problems. 

«This is an infamous bill imposed, which the government decided to impose on the National Assembly for unknown reasons,» said Heghine Bishryan, head of Orinats Yerkir faction. Remarkable is that even some MPs from the ruling Republican Party of Armenia put the reasonability of the bill into question. 

In particular, Vahram Baghdasaryan, head of the party's faction in the parliament, said that support for big exporters should not harm others. 

«The idea of the bill should be hailed, since it is an attempt to attract large exporter companies, which will create new jobs and will pay more taxes,» he said. «But at the same time, it is necessary to protect interests of ordinary, not so large exporters. That is why it is necessary to all the proposals coming from both pro-government and opposition-minded legislators. For example, it is worth considering ways for differentiated tax preferences for different segments of the economy.» 

Тhe bill will be put to vote on February 23. ($1- AMD 476.51). ----0-----