Armenia to abandon turnover tax and switch to unified tax system
госупр, на арка
В Армении собираются отказаться от налога с оборота и перейти на систему единого налога
Armenia to abandon turnover tax and switch to unified tax system
YEREVAN, 6 June. /ARKA/. The Armenian government is preparing to abandon the turnover tax and switch to a unified tax system. A package of relevant draft laws adopted by the National Assembly in the first reading, proposing to revise the turnover tax rates, was discussed in the government.
In particular, the turnover tax system, the existing problems and their possible solutions, as well as tax policy issues were discussed.
Prime Minister Pashinyan noted that it is necessary to formulate the motives correctly and stressed that the government has adopted a policy, according to which the turnover tax should be completely abandoned in Armenia, as it deforms the economy, tax system and creates unhealthy economic environment.
According to Nikol Pashinyan, it should be introduced step by step and move to a unified tax system.
Following the discussion, the head of the government instructed to continue the realisation of the necessary steps for the improvement of the tax sector.
The Ministry of Finance claims that the turnover tax has ceased to act as a tool for business development and has turned into an ‘extraordinary favourable treatment’, which allows some business entities to violate the principles of fair taxation.
According to the proposed amendments to the Tax Code, turnover tax for small and medium-sized businesses should be doubled. Thus, the rate for trade companies will be set at 10 per cent, for manufacturing companies - 7 per cent, and for catering - 12 per cent.
At the same time, the turnover tax threshold will remain unchanged at 120 million drams per year (equivalent to about 300 thousand dollars), and if a business exceeds this threshold, it will be forced to switch to VAT and profit tax.
In addition, as a result of the innovations, the minimum tax rate for trade enterprises will be reduced from 1.5% to 1%, for manufacturing enterprises - from 3.5% to 3%, and for the catering sector - from 4% to 3.5%.
As part of the reform, the turnover tax for notaries, lawyers and lottery organisers will be abolished from 1 January 2025 - they will have to pay general tax. It is proposed to exclude from microbusinesses the entities in the regions in the sphere of trade, as well as hairdressers, saunas and car services - the latter will be able to pay either turnover tax or VAT and profit tax. -0-
