ArmInfo.The introduction of a flat income tax scale will reduce the "shadow" in the country's economy and will help increase the competitiveness of the national economy. Economist Vahagn Khachatryan told ArmInfo on February 12 on the margins of an international forum called "The Tax System, Justice and Economic Development."
"If we plan to increase foreign investment, increase exports by increasing the competitiveness of products manufactured in the country, we must reduce taxes, establish political and economic stability, as well as uniform rules of the game," said Khachatryan.According to the expert, for a long period of time in Armenia there were no uniform rules for doing business, stability in the economy existed to the extent that it was necessary for political players.
And there is no reason to talk about taxes conducive to doing business, since the neighboring country of Armenia- Georgia in the eyes of the investor looked more attractive, often because of the presence of a comfortable tax environment. Meanwhile, a large tax burden, including income tax, according to the expert, leads to inadequate declaration of real incomes.At present, Armenian products are also uncompetitive within the framework of the EEU due to the availability of cheap energy in these countries. "If in former times Armenia won in terms of price-quality and inexpensive labor, today it has nothing to boast about, and the republic should think about new measures to stimulate the national economy," he stressed.It should be noted that currently the following scale of taxation is in force in Armenia: those who receive a monthly income of up to 150 thousand drams pay 23%, from 150 thousand to 2 million drams - 28%, and more than 2 million drams - 36%. As the financial authorities of the country recognize, the problem is that the effective income tax rate of 25.1-25.2% is high enough, which makes it negatively affecting the competitiveness of the national economy, export volumes, and not contributing to economic growth and poverty reduction.
Thus, according to official data, the lion's share of employees - 64.9% receive a salary of up to 150 thousand drams (about 610 thousand). 34.8% receive a salary of 150 thousand to 2 million drams, while employees with a salary higher than 2 million drams make up 0.3%. In this regard, from September 1, 2019, Armenia plans to switch to a flat income taxation system, which, regardless of the amount of wages, will be set at 23%.In addition, as shown by the Ministry of Finance research, the tax burden on income tax in Armenia is also high, which puts obstacles in the way of attracting foreign investment in the country. From 2020 to 2022 The government offers equal rates of income tax and dividend tax for citizens of Armenia and foreigners, setting them also at 23% (from 20% to 18% income tax and from 10% to 5% dividend tax - Ed.).