ArmInfo. Armenia will halve the time it takes to return VAT to exporters. Acting Prime Minister Nikol Pashinyan announced this on June 1 at an extraordinary meeting of the parliament.
According to him, according to the new Tax Code being developed, the VAT recovery period will be reduced from 6 to 3 months. In the future, as Pashinyan noted ,and this period will be reduced so that exporters can carry out their activities without obstacles.
Another task of the government, Nikol Pashinyan continued, is to bring working people out of the ''shadows''. Only in May of this year, 37,000 people were identified who were not registered at their place of work. At the same time, the state will encourage employers to pay high wages.
According to the Acting Prime Minister, even if we exclude all tax payments from the salary of a citizen who receives, for example, 100 thousand drams per month, it will still be a small amount. The new authorities of the country intend to create conditions not only for the creation of new jobs, but also for obtaining salaries that correspond to the contribution of employees to the development of production. In particular, as Nikol Pashinyan noted, at present the tax rate on profits and dividend tax is much lower than the income tax rate. This allows the employer to issue lower wages, and often to give them "black cash" in envelopes.
Now, based on a study of the situation and international experience, it is proposed to introduce a flat income tax scale, which will force the employer to issue higher salaries. According to the concept, the government proposes that all should set a flat income tax rate at 23%, regardless of the salary. The government also offers equal rates of income tax and dividend tax for citizens of Armenia and foreigners, setting them at the level of 23%. Within 5 years, the government intends to reduce the income tax rate to 20%. The income tax for high-tech workers will be reduced by 13%. Nikol Pashinyan reminded that earlier 206 thousand people involved in compulsory funded pension, also had the opportunity to save about 3 thousand drams.
Earlier in a conversation with the ArmInfo correspondent Finance Minister Atom Janjughazyan noted that the reduction of income tax in the short term contains fiscal risks. Today, as the head of the Ministry of Finance informed, the option of reducing the rate from the current 23, 28 and 36% to 20 and 25% is being considered, in particular. In this case, the budget losses will amount to 45-46 billion drams per 600 thousand workers. On this basis, when initiating a rate reduction, the Ministry of Finance must be sure that losses for the state budget will be compensated by funds derived from the "shadow". Otherwise, as the minister noted, Armenia will be forced to increase the debt burden to cover the budget deficit, which is extremely unacceptable. Thus, according to the expert, the reduction of income tax in this fiscal year is unlikely. The issue of reducing the tax burden was acute when the new Tax Code was adopted in 2016, but then, under pressure from the IMF and the World Bank, the new government of Karapetyan conducted a previously prepared version of the document through the parliament. The political opposition also raised this issue. Then the Yelk opposition bloc proposed to revise the income tax scale in the Tax Code, adding it with another "intermediate scale" for workers receiving wages in the range from 150 thousand to 300 thousand drams, fixing the rate of 26%. "The proposed changes will have a negative impact, including in terms of ensuring the revenue side of the state budget," then Finance Minister Vardan Aramyan said in February. He considered this proposal unjustified, since it does not provide for mechanisms to compensate for budget losses.