ArmInfo. The Armenian government rejected the legislative initiative on June 15 to raise the threshold of non-taxable VAT on annual turnover from the current 58.35 million to 115 million AMD. Thus, starting from January 1, 2019, Armenia reduces the threshold of non-taxable annual turnover from 115 million drams ($ 200,000) to 58.35 million AMD ($ 120,000), thereby returning to the rules in force until 2015.
According to the Minister of Finance of Armenia Atom Janjughazyan, according to the results of the analysis of taxpayers' reports from trade collection, which carry out trade activities at fairs, out of 785 economic entities, the average annual rate of 770 (98%) was 3.7 million drams. This, according to the minister, shows that even in the context of lowering the threshold of non-taxable VAT turnover, their annual turnover can grow by 25-28 times and continue to stay "outside the risk group." At the same time, with the approval of the document, the budget losses in terms of tax revenues may amount to about 11 billion drams.
In addition, as Janjughazyan noted, reducing the threshold, the interest of business entities to split business into parts is eliminated, in order to fit in the established framework. According to him, there are many facts of revealing the artificial fragmentation of business, which does not fit into the borders of the government's declared policy of combating the shadow economy. At the same time, as the head of the Armenian Ministry of Finance pointed out, even taking into account the threshold of a non-taxable annual turnover fixed in the new Tax Code of 58.35 million drams, the figure is significantly higher than that used in world practice.
Meanwhile, Chairman of the NGO "Protection of Taxpayers" Pailak Tadevosyan, reducing the threshold of the non-taxable annual turnover from 115 million drams to 58.35 million drams, as it was until 2015, is an absolutely unjustified measure. "Serious expert assessments and public hearings are needed here." The former government ignored the opinion of the majority of experts that the lower threshold should not be lowered, but instead increased to 150 million and even 200 million drams, but with a rigid, uncompromising condition for the release of goods through cash registers and fiscal checks, "Tadevosyan said. According to him, as world practice shows, it is the government's unwillingness to listen to the opinion of professional communities and market participants, ignoring their opinion, leading to serious public discontent.