Thursday, September 12 2019 14:43

ArmInfo.The Government of Armenia will return the debit balance of VAT of 56 billion drams to business entities. The corresponding decision was made at a cabinet  meeting on September 12.

Earlier, on September 7, Armenian Prime Minister Nikol Pashinyan  announced that an unprecedented economic proposal was being discussed  in the government. "Thousands of organizations have VAT debit  balances that were formed before July 1, 2017. If you don't go into  details, these are the amounts that the state owes to business  entities under the VAT," he wrote on his Facebook page.

According to the prime minister, the proposal is unprecedented since  the government is discussing the possibility of returning to the  business entities a debit balance in the amount of about 56 billion  drams.  "The meaning of the proposal is that business entities that  have long lost hope of getting these amounts back will invest them in  the economy. This is, in fact, a state infusion of more than $ 100  million into the economy, which has no precedent in the history of  our country'', Pashinyan explained.

According to the Chairman of the State Revenue Committee (SRC) of  Armenia David Ananyan, who introduced the legislative initiative, a  number of adjustments in this direction are proposed. "We all know  that there are debit balances or so-called "overpayments" in the area  of value added tax (VAT). After the new Tax Code entered into force,  the difference between the old and the new debit balance was  established.  The new ones - after July 1, 2018 are returned to  economic entities on the basis of their own statement in quarterly  terms, and the old ones are sent exclusively to pay off upcoming VAT  liabilities. With this decision, we eliminate the distinction between  old and new receivables, which will be applied from the 1st November  2020, "he explained.

Moreover, as the head of the SRC pointed out, the very next day after  the approval of the bill, taxpayers can apply for receiving  overrpayments formed at that time. The following scheme will be  applied: for business entities with debts of less than 5 million  drams, VAT debit will be returned only on the basis of applications,  without desk audits, for debts of 5 to 40 million drams, VAT funds  will be returned in a simplified manner, based on the application of  the economic entity and information available to the tax authority,  and in case of exceeding the threshold of 40 million drams, the funds  will be refunded after the documentary study and verification .

According to the head of the tax and customs committee, the matter  concerns about 9 thousand business entities, 3 thousand of which are  old debits, the state owed 56 billion 443 million drams. So,  according to him, after making the decision, persons with a debt of  up to 5 million drams will automatically receive their funds. "By the  end of the year, we will return 50 billion drams from the indicated  56 billion drams," Ananyan said.

The head of the SRC reminded that as of January 2018, the tax  authority owed 275 billion drams to business entities. Having  resolved the situation with 50 billion drams, as the chief tax  specialist pointed out, 72-75 billion drams remain for current  obligations, which are formed and repaid. "I think by January 1, 2020  we will be able to declare that within two years we have reduced our  debts to business entities by 220 billion drams, which is common for  a strong state," he said.

"It turns out that we financed the economy in the amount of 220  billion drams," Prime Minister Nikol Pashinyan stated. In addition,  as the head of government pointed out, business entities were not  even hoping to receive these 56 billion drams. "This opportunity  arose due to an increase in tax revenues," Pashinyan explained.