Thursday, November 1 2018 15:22

ArmInfo. Armenia will halve the time it takes to return VAT to exporters. Acting Prime Minister  Nikol Pashinyan announced this on June 1 at an extraordinary meeting of the parliament.

According to him, according to the new Tax Code being developed, the  VAT recovery period will be reduced from 6 to 3 months. In the  future, as Pashinyan noted ,and this period will be reduced so that  exporters can carry out their activities without obstacles.

Another task of the government, Nikol Pashinyan continued, is to  bring working people out of the ''shadows''. Only in May of this  year, 37,000 people were identified who were not registered at their  place of work. At the same time, the state will encourage employers  to pay high wages. 

According to the Acting Prime Minister, even if we exclude all tax  payments from the salary of a citizen who receives, for example, 100  thousand drams per month, it will still be a small amount. The new  authorities of the country intend to create conditions not only for  the creation of new jobs, but also for obtaining salaries that  correspond to the contribution of employees to the development of  production. In particular, as Nikol Pashinyan noted, at present the  tax rate on profits and dividend tax is much lower than the income  tax rate. This allows the employer to issue lower wages, and often to  give them "black cash" in envelopes.

Now, based on a study of the situation and international experience,  it is proposed to introduce a flat income tax scale, which will force  the employer to issue higher salaries. According to the concept, the  government proposes that all should set a flat income tax rate at  23%, regardless of the salary. The government also offers equal rates  of income tax and dividend tax for citizens of Armenia and  foreigners, setting them at the level of 23%. Within 5 years, the  government intends to reduce the income tax rate to 20%. The income  tax for high-tech workers will be reduced by 13%. Nikol Pashinyan  reminded that earlier 206 thousand people involved in compulsory  funded pension, also had the opportunity to save about 3 thousand  drams.

Earlier in a conversation with the ArmInfo correspondent Finance  Minister Atom Janjughazyan noted that the reduction of income tax in  the short term contains fiscal risks. Today, as the head of the  Ministry of Finance informed, the option of reducing the rate from  the current 23, 28 and 36% to 20 and 25% is being considered, in  particular. In this case, the budget losses will amount to 45-46  billion drams per 600 thousand workers. On this basis, when  initiating a rate reduction, the Ministry of Finance must be sure  that losses for the state budget will be compensated by funds derived  from the "shadow". Otherwise, as the minister noted, Armenia will be  forced to increase the debt burden to cover the budget deficit, which  is extremely unacceptable. Thus, according to the expert, the  reduction of income tax in this fiscal year is unlikely. The issue of  reducing the tax burden was acute when the new Tax Code was adopted  in 2016, but then, under pressure from the IMF and the World Bank,  the new government of Karapetyan conducted a previously prepared  version of the document through the parliament. The political  opposition also raised this issue. Then the Yelk opposition bloc  proposed to revise the income tax scale in the Tax Code, adding it  with another "intermediate scale" for workers receiving wages in the  range from 150 thousand to 300 thousand drams, fixing the rate of  26%. "The proposed changes will have a negative impact, including in  terms of ensuring the revenue side of the state budget," then Finance  Minister Vardan Aramyan said in February. He considered this proposal  unjustified, since it does not provide for mechanisms to compensate  for budget losses.