Finance Minister Promises Changes to Tax Code
YEREVAN, April 16. /ARКА/. Armenian Finance Minister Vahe Hovhannisyan has commented on Prime Minister Nikol Pashinyan’s statement that the current Tax Code is “anti-state” and announced new changes.
“I think what the prime minister meant is that a number of our tax regulations have helped some economic entities evade taxes. The lack of documentation requirements for companies operating under the turnover tax system has created a mechanism which they use to make sales without documentation, hiding the actual volumes,” Hovhannisyan said at a press conference on Monday.
According to him, in some cases the fines for non-payment were lower than bank interest rates.
"Our work now is aimed at understanding in a broader sense how to conceptually approach this or that tax, because in addition to collecting taxes or providing funding, it is necessary to take into account aspects such as establishing justice," Hovhannisyan said.
"If it turns out that most of the legislation needs to be changed, then we will have a new Tax Code. If it turns out that these changes will affect only 20-30% of the code , then the Tax Code will be updated," Hovhannisyan said.
The minister agreed that frequent changes in tax legislation are a problem, since they create an atmosphere of uncertainty.
"We are currently discussing the introduction of a system that operates in other countries. According to this system, any change related to the Tax Code must be implemented along with the budget, since it implies a reduction or increase in taxes or revenues, which are interconnected with expenses and deficits," Hovhannisyan said.
The Minister recalled that the Tax Code was adopted in 2017, and since then a lot has changed, including conceptual approaches related to the issue of tax collection.
“The question arises whether the problem lies in the Tax Code, which will need to be changed so often to adapt it to the current realities. When we discuss these issues and determine the source of the problems, this issue will resolve itself. But such a number of changes is unacceptable, so we have taken on all this hard work so as not to create additional stress for business entities,” Hovhannisyan said.
He recalled that the Armenian government’s program for 2021-2026 provides for the gradual abolition of tax benefits, since the authorities consider them ineffective.
“Several ideas are currently being discussed, and when these discussions become meaningful, we will announce them and initiate broader discussions,” Hovhannisyan said.
Among the key factors, the minister named the creation of incentives for rapid development and growth, so as not to create an imbalance between the general tax system and the current preferential tax system. -0-
