Pashinyan: Changes to turnover tax not aimed against small businesses

YEREVAN, December 16. /ARKA/. Armenian Prime Minister Nikol Pashinyan stated that the changes to the turnover tax, which will come into effect on January 1, 2025, are not intended to put pressure on small businesses.

"There are opinions that these changes have been designed to put pressure on small businesses, but this is not the case. The current legislation stipulates that, in particular, retail outlets must pay a 5% tax on their turnover if the goods they sell are not documented—that is, if they sell any goods without recording where they were purchased from," Pashinyan noted during a live broadcast on Facebook.

According to him, if entrepreneurs indicate the source of goods, the tax rate can be reduced to 1.5%. 'In principle, this regulation has a problem because, previously, it seemed like we were giving people the opportunity to legalize the shadow economy. This policy needs to be changed; it is illogical and anti-state,' Pashinyan stated.

On the other hand, as the Prime Minister noted, it is impossible to reverse a process that has been ongoing for years with a single step. “That is, if the purchased goods are not documented, a 10% tax must be paid. However, if they are documented, the tax is reduced—from 1.5% to 1%. In fact, for legally operating businesses, the tax is reduced by 0.5%,” Pashinyan explained.

According to him, the problem arises not for small businesses, but for large ones, because with undocumented goods, large businesses import goods worth millions or even billions, and then sell them through small retail points. This allows them to hide the actual volume of imported goods and avoid paying significant taxes. “This will help reduce the shadow economy in large businesses, while the tax for small businesses will be lowered,” he concluded.-0-