SME Cooperation Association suggests removing income tax for employees with a salary below 300 thsd AMD

ArmInfo. Samson Grigoryan, Vice President of the SME Cooperation Association, is convinced that the new Tax Code may cause serious problems for business. 

At a press conference dedicated to the new Tax Code of Armenia, Grigoryan said that the Tax Code provides excessive powers to the Armenian State Revenue Committee. "The State Revenue Committee is getting powers which are almost similar to the rights of a court instance," he said, adding that in certain cases the Committee will have the right to restrict the entrepreneur's property right without a court- approved warrant. "Even in case an entrepreneur applies to court to settle his problem, he needs to pay a fine. Only after that the court instance starts considering the case. So, it appears that the Code has been created for punitive purposes," he said.

He thinks that the Tax Code will not develop business in Armenia. Quite the opposite, it will result in business downgrading. "The reduction of the taxation threshold in compliance with the Tax Code will make Armenian businessmen develop their businesses abroad. This will be more favorable for the businessmen but will have negative consequences for the Armenian market," he said. As regards the businessmen, who will stay in Armenia, they will have to import raw materials from other states, he added.  

Grigoryan said that due to the reduction of the income tax threshold, businessmen will not register the new employees or will have to cut down the personnel. This will increase unemployment. 

"We suggest recalling, revising and seriously discussing each provision of the new Code. We also suggest removing the income tax for the employees with a salary below 300 thsd AMD or reducing the tax to 5- 10% instead of the recommended 23% fixed in the Tax Code," Grigoryan said.  

To note, on June 15, the National Assembly of Armenia adopted the new draft Tax Code in the first reading with 68 pros, 21 cons and 18 abstentions. The ruling Republican Party of Armenia totally supports the document.