ArmInfo.Until 2023, Armenia intends to reduce the income tax rate to 20%. This is stated in the draft law "On Amendments and Additions to the Tax Code of the Republic of Armenia". The document, developed by the Ministry of Finance of Armenia, is posted on the single portal of legal acts e- draft.am.
Currently, Armenia has the following scale of taxation: those who receive up to 150 thousand drams of salary pay 23% of income tax, receiving from 150 thousand to 2 million drams - 28%, and more than 2 million drams - 36%. Profit is taxed at a rate of 20%. "The problem is that the effective income tax rate of 25.1-25.2% is too high, and therefore does not contribute to economic growth or reduce poverty. Moreover, a large tax burden on income tax leads to inadequate declaration of real income" - recognize the financial authorities of the country.
At the same time, as the studies of those responsible for the field showed, the tax burden on the profit tax in Armenia is relatively high, which puts obstacles in the way of attracting foreign investments into the country. Taking this into account, including following the world trends, the Armenian government in its program of activities fixed the norm on reducing the tax burden on direct taxes (income tax, incomes of individuals) and a certain increase in indirect (VAT, excise and a number of duties).
In this regard, from July 1, 2019, the government intends to switch to a flat taxation system on the income tax line - to establish a tax of 23% regardless of the salary, regardless of the salary. Further, until 2023, the rate will be reduced to 20% (from January 1, 2020 - 22%, from 2021 - at the level of 21%, in 2022 - 20.5%, and from 2023 - 20%). At the same time, Armenia will return to the previous conditions of the mandatory pension system the monthly mandatory payments on them from the working citizen will be 5% (with 5% co-financing by the state) instead of established from July 1 of this year. 2.5% of salary and 7.5% from the state treasury. From 2020 to 2022 The government also offers equal rates of income tax and dividend tax for citizens of Armenia and foreigners, setting them also at 23% (18% profit tax and 5% dividend tax). Earlier, in a conversation with journalists, the head of the State Revenue Committee of Armenia, David Ananyan, said that at this stage, the presented version of the revision of income tax rates in the framework of the introduction of a flat scale, has a goal to reduce the "shadow" in the economy and make it more accountable to the tax authority. "Then, when the financial authorities of the country have a clear idea of the real incomes of local businesses, it becomes clear exactly how and at what speed the income tax rate can be reduced to the cherished 20%. At present, we don't talk about reducing the rate immediately to 20% as this could cause a collapse of the fiscal system, "he said.