Turnover tax rate should be lowered to 1 percent for SMEs and paperwork obligation lifted - expert
17.02.2015,
16:39
Turnover tax rate should be lowered to one percent for small and mid-scale businesses and without obliging small and medium entrepreneurs to provide tax authorities with documentary evidence of their wholesale purchase deals with larger firms, Gagik Makaryan, chairman of the Union of Employers of Armenia, said Tuesday at a news conference.
YEREVAN, February 17. /ARKA/. Turnover tax rate should be lowered to one percent for small and mid-scale businesses and without obliging small and medium entrepreneurs to provide tax authorities with documentary evidence of their wholesale purchase deals with larger firms, Gagik Makaryan, chairman of the Union of Employers of Armenia, said Tuesday at a news conference.
«We should take into account that micro enterprises and individual entrepreneurs who have two or three employed workers can survive only this way,» he said.
The law on turnover tax was revised last year lowering the turnover tax for vendors with annual sales of up to 58 million drams ($125,000) from 3.5 percent to 1 percent, but small business owners were to provide tax authorities with documentary evidence of their wholesale purchase deals with larger firms or face heavy fines.
The government argued the change was meant to crack down on tax evasion by big business, but vendors say they cannot comply with this requirement because their suppliers usually refuse to provide them with receipts and invoices.
The revised law was to come into force in 2014 October but after a series of demonstrations staged by vendors in September and October the government was forced to postpone its enforcement until February 1.
After fresh protests this year the enforcement was postponed until July 1.
Makaryan said SME sector shouldn't be disturbed. He said small and medium businesses «solve unemployment and poverty problems in Armenia, and budget revenue should be filled at the account of large entrepreneurs.
There are 70,000 small and medium enterprises in Armenia with 58,000 micro and small businesses among them. SMEs' share in GDP is 43%, but the sector ensures only 5 to 6 percent of budget tax revenue.
According to the National Statistical Service of Armenia, poverty rate in the country was recorded at 32% in 2013 against 32.4% in 2012. It means every third resident here was poor (967,000 people). Of them 402,000 people or 13.3% were very poor and 82,000 or 2.7% lived in a desperate penury.
The State Employment Agency's figures show that the number of unemployed people rose 17.9% over 2014 from 55,900 to 65,900. --0-------
