Head of Armenia's State Revenue Committee on protests by SME representatives: They prefer to remain "in the shadows"
YEREVAN, June 9. /ARKA/. Head of Armenia's State Revenue Committee Eduard Hakobyan commented on the protests by representatives of small and medium-sized businesses (SMEs), who are unhappy with the increase in the turnover tax for SMEs from 5% to 10%.
"I personally met with everyone. The main problem is that people are afraid to document their sales and profits, prefer to remain "in the shadows" and receive large incomes, all other things being equal. The government has taken a step forward and introduced a six-month support program, within the framework of which business entities can pay taxes at the previous level while they adapt to the new regime," Hakobyan told reporters on Monday.
According to him, there were few applicants in the first quarter.
"This means that people prefer to remain "in the shadows". Many do not understand that under the new conditions their taxes may even decrease or increase slightly. It is inappropriate to talk about raising taxes. We are talking about new documentation and accounting. We do not want them to remain in the "shadows". And if there is one, large ones (business entities - ed.) will also go there," Hakobyan said.
On tax changes
Amendments to the Tax Code imply a change in the tax regime for certain areas of professional activity with their transfer to the value added tax and income tax system. It is expected that as a result of the changes, the budget will receive an additional 13 billion drams.
According to the amendments that came into force on January 1, 2025, SMEs with an annual turnover of less than 115 million drams are required to pay a 10% turnover tax if their goods (services) are not documented, and if they are documented, the tax rate is reduced from 1.5% to 1% of turnover.
Representatives of the expert community and business came to an unambiguous conclusion: these changes will only lead to an increase in the cost of services provided (accountants, lawyers and some other categories) by up to 40%, and this burden will fall directly on the shoulders of citizens. -0-
