Head of Union of Banks of Armenia: Tax Code will make employers provide envelop wages

ArmInfo. Head of the Union of Banks of Armenia Samvel Chzmachyan thinks that replenishment of the state budget should be ensured by developing the economy rather than doing the arithmetic reflected in the draft Tax Code of Armenia. 

When commenting on the graduated income tax, Chzmachyan pointed out that the burden for each employee may be insignificant, but it will have an extremely negative psychological impact on the population. At the same time, he thinks that the growth of the income tax will increase the wage shadow and will make the employers provide envelope wages again.      

On June 9, Deputy Head of the Armenian State Revenue Committee Vakhtang Mirumyan said in Parliament that the income tax in Armenia will become graduated. Currently, persons with a monthly salary of up to 120 thsd AMD pay 24.4%, those with a salary ranging from 120 thsd to 2 mln pay 26%, and those with a salary of over 2 mln pay 36%. Under the new Code, the citizens with a salary of up to 120 thsd AMD will pay 23%, those getting a salary ranging from 120 thsd AMD to 1 mln AMD - 28%, and those with a salary of 1 mln and more - 33%. Those getting 1.5 mln AMD per month will pay 23% for the first 120 thsd; 28 thsd - for the next 880 thsd; and 33% for the part exceeding 1 mln. He said that the income tax significantly grows for those getting a salary of more than 2 mln AMD. "Only 800 people receive such a salary in the country," he added.

On June 15, the National Assembly of Armenia adopted in the first reading the new Tax Code of Armenia with 68 pros, 21 cons and 18 abstentions. All the parties, except the ruling Republican Party of Armenia, object to the new Tax Code.  The second reading is scheduled for autumn 2016.