ArmInfo. The Ministry of Finance of Armenia submitted to the public a draft law "On Amendments and Additions to the Tax Code of the Republic of Armenia", which defines the concept of "micro business", as well as establishes a taxation framework for this type of activity. The document is posted on the single portal of legal acts e-draft.am.
The authors of the draft law remind that at this stage, the reduction of alternative tax systems is also being discussed in Armenia. Today, there are 5 alternative tax systems in operation - self-employed (certain types of activities with annual turnover up to 9 million drams are exempt from taxes, except for import duties), family business entities (family members with turnover up to 18 million drams, pay only import taxes), tax payers from turnover (with a turnover of up to 115 million drams) and patent tax (those carrying out certain types of activities pay a fixed tax, without restriction of turnover. "According to the Ministry of Finance, as a result of the availability of alternative the tax created difficulties, inconsistencies and corruption risks, business becomes more vulnerable in the relationship with the tax authorities.
As a result, within the framework of the proposed project, from January 1, 2020, the financial authorities of Armenia propose to significantly simplify the taxation system for small businesses. In particular, instead of two alternative tax systems - self-employed and family entrepreneurship, the government intends to introduce one micro-enterprise taxation system. "This system can be used by both legal entities and individual entrepreneurs (IE), and individuals who are not individual entrepreneurs if their annual turnover does not exceed 20 million drams," the document reads.
In the document also reads micro-business entities will not be considered organizations and individual entrepreneurs that operate in shopping centers, retail outlets and fairs within the administrative borders of Yerevan or outside the capital. In the course of their activities, they can attract individuals to work as employees, and income tax on them will be paid in the amount of 5 thousand drams.
"The proposed document is aimed at improving the competitiveness of the national economy and investment attractiveness by changing the system of redistributing the tax burden, as well as simplifying the tax system of micro business," the justification for the bill reads.
Earlier, the Prime Minister of Armenia Nikol Pashinyan called on the financial authorities of the country to think about establishing symbolic taxes in relation to micro business and conducting soft administration.