Armenian premier unveils details of new tax reforms
YEREVAN, November 3. /ARKA/. Armenian Prime Minister Tigran Sargsyan,
speaking Wednesday at a session of the Small and Medium Size
Enterprise Development Council, unveiled details of new tax
reforms. He said that the aim of the legislative package is to improve
business environment for small and mid-scale businesses and shift tax
burden to high-income areas. The premier said that the income tax
scale will be based on a progressive principle.
`It means the upper benchmark, which stood at 20% before that, will be
moved up,’ he said. `Today we have 10- and 20-percent benchmarks, and
we also set 25% for those individuals who have AMD 2-million and
higher income.’
Sargsyan pointed out another change that applied to heavy
drinks. These legislative changes are aimed at setting equal taxation
conditions for manufacturers and importers, since they ought to act at
the heavy drinks market in accordance with international norms.
He said that other approach might lead to a similar situation in
partner countries.
The prime minister said that amid the crisis in Armenia priority was
given to domestic manufacturers.
`Time has come to return to equal conditions, and we are doing it,’ he
said. `But at the same time, we are raising taxes on elite drinks. In
particular, we are increasing cost rate for vodka by 50% leaving the
lower benchmark unchanged, at AMD 500. It means that if cheap vodka
occupies 80% of our market, and elite vodka 20%, the increased rates
will result in a certain price hike in the elite vodka market. But
this will have no adverse impacts on our market.’
He said that Armenian manufacturers, especially small and medium,
would take advantage of these changes.
`And from expensive vodka we’ll collect extra AMD 2 billion for our
budget.’ Sargsyan also said luxury tax would be instituted.
`We raise rates on expensive cars for the first time. Customs duty on
cars which cost more than $90,000 is raised by 20%,’ he said.
The premier also said that payments for starting gambling businesses
and lotteries are raised by 50%. They will bring additional AMD 2
billion to the government budget.
`We view expansion of the list of activities subject to licensing as
an important step for small and medium businesses, such as catering
and hotel businesses, transportation of passengers, hairdressing, car
parking and billiard businesses,’ Sargsyan said.
Sargsyan also presented steps to be taken to simplify tax
administration for small- and mid-scale businesses and to tighten
sanctions for large businesses. In particular, to improve business
environment for small businesses it was decided to raise the income
benchmark from AMD 100,000 to AMD 10 million to make it possible to
submit financial reports without inspections and advance coordination
with the government-affiliated State Revenue Committee.
`We ease requirements to small businesses, but instead tighten grip
upon large businesses, particularly large importers who fail to submit
necessary reports,’ Sargsyan said. `Therefore appropriate levers will
be given to the State Revenue Committee.’
Exporters of ferrous and nonferrous metals as well as wood exporters
will be obliged to pay.
The prime minister said that there is also one change for banks. This
change relates to capital asset reassessment.
`Unlike the real sector, banks enjoyed a preference to reassess own
capital assets, and this preference impacted baseline profit tax
assessment,’ he said. `Now we strip banks of this preference and
oblige them to use private specialized agencies’ services.’
Sanctions for cargo transportation without appropriate papers will be
toughened.
`It, first of all, applies to large taxpayers whose turnover exceeds
AMD 15 million,’ Sargsyan said. `Punishment for breaching rules of
usage of cash registers will be stricter than before.’ ($1 – AMD
378.94) -0-
03/11/2011 15:54
http://www.arka.am/eng/economy/2011/11/03/28884.html