ArmInfo. Chairman of the Union of Armenia's employers Gagik Makaryan advocates the temporary introduction of flat income tax scale. He stated this on February 12 on the margins of an international forum called "The tax system, justice and economic development," answering the question of ArmInfo.
According to the expert, the very idea of using a flat scale can be justified in terms of increasing the competitiveness of the national economy. But the norm, as he believes, must be temporary and well thought out in terms of establishing a scale. "Perhaps it would be more expedient to establish two scales - 20% for payers up to 150 thousand drams and 23% for those whose monthly income exceeds this amount. Thus, we would ensure the principle of social justice " Gagik Makaryan said.
To note, from September 1, 2019, Armenia plans to switch to a flat income taxation system, which, regardless of salary, will be set at 23%. Currently, Armenia has the following taxation scale: those who receive a monthly income of up to 150 thousand drams pay 23%, from 150 thousand to 2 million drams - 28%, and more than 2 million drams - 36%. As the financial authorities of the country recognize, the problem is that the effective income tax rate of 25.1-25.2% is quite high, and therefore negatively affects the competitiveness of the national economy, export volumes, does not contribute to economic growth and reduce poverty in the country. Moreover, a large tax burden on the income tax line leads to inadequate declaration of real income. As a result, as the Ministry of Finance states, the bulk of the declared income is concentrated in the "weight category up to 150 thousand drams". According to official data, the lion's share of hired workers - 64.9% receive a salary of up to 150 thousand drams (about 610 thousand), 34.8% receive a salary of up to 2 million drams, and employees with a salary higher than 2 million drams 0.3 %