Microbusiness under attack

On the elections, Nikol Pashinyan spent so many resources and money to “buy” voters’ votes at the expense of the state budget that he put the budget under attack. Not only the budget of this year, but also of the following years is under attack.

The increase of pensions alone requires additional spending of more than 200 million dollars annually from the budget. Almost that much more is needed to continue health insurance. Not only the system, but also the budget was not ready to bear the burden of health insurance. But on the eve of the elections, according to Nikol Pashinyan, they invested hastily and put an additional heavy burden on the budget.

We are not even talking about burdening the budget with various other programs and subsidies.

All of these require huge sums of money in order to ensure their continuity in the future. They cannot cancel the increased pension or the invested health insurance just before the elections, citing lack of money. It will be a death blow for any government.

In order to avoid that blow, before the ink of the election was dry, they went on the attack. At the very first session of the government following the elections, they decided to increase the excise tax. They are preparing to carry out widespread stamping of goods as soon as possible.

“From January 1, 2027, the stamp marking should be maximally extended.

In other words, we should label what can be labeled. We should label what cannot be stamped, because there is no such thing that cannot be stamped,” Nikol Pashinyan gave this instruction to the SRC at the government meeting.

Stamping seems to be a very innocent and justified step. But we have already seen in the past what consequences it has on the prices of goods. Prices go up immediately after stamping. The example of dairy products is still fresh, when the prices increased by up to 7-8 percent after the branding.

From January 1, when they are preparing to stamp all possible and impossible products, a widespread increase in their prices is expected, and the citizens will bear the burden of this increase.

Micro-business is also targeted by the government. They do not intend to save even micro-business, which solves the problem of existence for many families.

At the last session of the government, Nikol Pashinyan presented an ultimatum to micro-businesses. He announced that if a micro-enterprise fails to issue a tax receipt 3 times within 1 year, that enterprise will be deprived of the right to work in both the micro-business and turnover tax systems for 5 years and will have to enter the VAT field, not hiding that this will mean actual closure and cessation of activity for them.

“We need to double the threshold for micro-business, and we need to introduce a regulation that if an enterprise is found to have failed to release tax returns 3 times in 1 year, it will be deprived of working in both the field of micro-business and turnover tax for 5 years. I understand that this may mean a de facto closure for some, but then let them issue HDM coupons, it cannot be otherwise.

From January 1, this regulation should also come into force,” Nikol Pashinyan gives advice to small businesses.

At first glance, such statements about increasing tax discipline and showing turnover seem justified and well-founded. The business must register its turnovers, come out of the shadows. But it is not always like that. And it has its deep reasons. However, instead of understanding those reasons and providing solutions, the government is going to put the micro-business under the administrative baton, fine it 3 times and transfer it to the universal tax system, where the tax burden is many times heavier.

In that system, micro-business is doomed to stop operating. Not only because the tax burden is much heavier, but also because the associated costs will increase. If the micro-business in the field of turnover tax can independently carry out its accounting and somehow ensure its existence, in the field of VAT, it will have to pay a considerable sum to use the services of an accountant. And micro-business or many entities operating in that field cannot afford such luxury.

In the end, it is necessary to understand that it is not a good condition when a micro-business avoids showing its turnover. The tax burden is so heavy, the costs are so high that without a shadow it becomes simply impossible to continue the activity. People are forced to take risks, enter the shadows, in order to ensure their existence.

When they increased the tax burden on micro-businesses, doubled the turnover tax, then it was necessary to think about this. But in such cases, they only think about bringing money to the budget, no matter what happens later. They are doing the same now. They unnecessarily burdened the budget and are preparing to destroy the economy and citizens in order to cover up the consequences of what they have done.

Before putting the micro-business under the tax baton, one should first think about easing the latter’s tax burden. Only raising the turnover threshold does not solve the problem in this case. It is necessary to lower the tax burden so that the micro-business can get out of the financial burden. Otherwise, what they intend to do will become a serious threat to micro-business. Not only because it may end up in a much tougher tax field. The existence of micro-business will suffer even if it continues to operate under stricter administrative conditions, even remaining in the field of micro-business or turnover tax. It will bankrupt and drive many people out.

It is necessary to realize that micro-business is a social business, and it should be approached as a social business, and not as a bag of money for the budget.

HAKOB KOCHARYAN

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