Small and medium businesses protest in Yerevan against tax changes and mandatory income declaration
YEREVAN, February 13. /ARKA/. Representatives of small and medium-sized businesses gathered again for a protest in front of the Armenian government building on Thursday morning.
The protesters are opposing amendments to the Tax Code, which include an increase in the turnover tax rate from 5% to 10% and the introduction of a mandatory income declaration system.
They argue that the change, which came into effect on January 1, 2025, has significantly increased their tax burden, potentially causing serious problems for SME representatives.
Last week, a meeting was held in the National Assembly between SME representatives and Babken Tunyan, Deputy Chairman of the Standing Parliamentary Committee on Economic Affairs. Business representatives were dissatisfied with the outcome.
On Tax Changes
The amendments to the Tax Code involve a change in the tax regime for certain sectors of professional activity, moving them to the value-added tax (VAT) and profit tax systems. It is expected that these changes will generate an additional 13 billion drams in the budget.
Under the changes that took effect 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 (or services) are undocumented. If the goods or services are documented, the tax rate is reduced from 1.5% to 1% of turnover.
Representatives from the expert community and business have come to a clear conclusion: these changes will only lead to an increase in the cost of services (accountants, lawyers, and some other categories) by up to 40%, and this additional cost will be passed on directly to consumers.
On Income Declaration
By May 1, 2025, residents of Armenia who were employed (under an employment contract) or worked under a civil contract and received income subject to income tax under this contract must submit an income tax declaration for 2024.
This also applies to individuals who submitted a declaration for the reporting year in the previous year (2023) or who fall into other categories required to file a declaration in 2025. This includes officials, participants in commercial organizations (shareholders, members), beneficiaries of the law on combating money laundering and terrorist financing, and recipients of loans and/or credits exceeding 20 million drams.
