MP: New tax rates can either decrease SMEs or lead to a larger shadow  economy

ArmInfo.The implementation of doubled turnover tax rates in Armenia will either result in a notable  decrease in small and medium-sized businesses, a growth in the shadow economy within the sector, or both, according to an article written by MP Tadevos Avetisyan from the opposition faction " Armenia". The  article was received by ArmInfo.

The deputy noted that starting from January 1, 2025, the turnover tax  rate in the country has doubled.  Specifically, the turnover tax rate  for commercial activities has increased from 5% to 10%, in the  manufacturing sector - from 3.5% to 7%, and in the catering sector -  from 6% to 12%. Lawyers and notaries were no longer included in the  sales tax system along with realtors, hairdressers, car repair shops,  builders and others. "The government has set a goal of collecting an  additional 18.6 billion drams in turnover tax. What is actually  happening? In January 2025, compared to the previous year, total tax  revenues to the state budget increased by 31.1%, with turnover tax  revenues, making up only 6.6% of it, increasing by 19.4%. And this is  despite the doubling of sales tax rates. Essentially, what has been  previously stated is being confirmed: the implementation of doubled  turnover tax rates is resulting in either a significant reduction in  small and medium-sized businesses, a growth in the shadow economy, or   both," the parliamentarian wrote.