ArmInfo. Establishing equal for the citizens of Armenia and foreigners rates of income tax and dividend tax at the level of 23% according to the formula 18% plus 5% is not a sufficient condition for increasing the investment inflow into the Armenian economy. On February 12, answering the question of ArmInfo, Chairman of the Union of Employers of Armenia Gagik Makaryan stated this on the fields of the international forum called "Tax System, Justice and Economic Development".
According to him, the current Tax Code of 2016 does not create opportunities for the development of the business environment. The document has various mechanisms that constrain its growth. In the meantime, as the economist pointed out, tax laws should serve the interests of both the local business and the foreign investor.
At the same time, according to the expert, one should not count on an investment boom only by making cosmetic changes in Tax Code. According to him, attracting investment is a delicate matter, and such small steps cannot be stimulated. "If we want to lure an investor from developed countries, including Switzerland, where even the transport works to the nearest second, we have to work seriously on ourselves. In particular, to polish not only the Tax Code, but also the accompanying legislation - the laws" On Foreign investments, bankruptcy, free economic zones need to be seriously revised. In addition, the investor will be interested in Armenia not because the tax burden is high or not, but first of all he will be interested in having a qualified This workforce in the country."Labor productivity in Armenia (revenue per employee) does not reach 10 thousand dollars annually, in European countries the figure reaches 110-120 thousand dollars. That is, first of all we have to reform the education system." The investment field does not interest the investor, if he comes to Armenia and realizes that even with a favorable tax field he will not be able to secure high incomes due to low labor productivity. One should not overlook the fact that Armenia has a problem with expensive energy resources, and there is no alternative to Upper Lars (the only land road in the Russian Federation. Ed.). The problem with the presence of corruption in the judicial system and the absence of the institute of arbitration is also at the forefront, " Makaryan said.
To note, from 2020 to 2022 the government also offers equal rates of 23% to the income tax and dividend tax for citizens of Armenia and foreigners - from 20% to 18% income tax and from 10% to 5% dividend tax. The loss in terms of tax revenues of the budget in case of establishing equal conditions for residents and non-residents on the tax on dividends will be 1-1.3 billion drams. Meanwhile, according to the authors of the initiative, it is possible to reduce the amount of "shadow" in the economy "and stimulate investments.