This document, which stipulates some tax increases, and in the case of salaries of more than 1 million AMD applies a progressive tax, may result in incomplete declaration of taxpayers. In other words, it can foster the enlargement of the shadow while it is necessary to increase the tax base by reducing tax types and rates. The experts said this who participated in the discussion on “The New Tax Code Draft and the Challenges of the Economy”. at Media Center on June 30.
For the first time a comprehensive tax code is adopted in Armenia. So far the Law on Taxes and other legislative acts and government decisions were applied. "This is the first time that all these will be brought together and a code on a conceptual basis will be developed," Tax Board Member Vahagn Hambardzumyan, said. The new Tax Code consists of 723 pages and over 460 articles, according to Hambardzumyan it has "many positive" but there are also drawbacks.
Currently the following taxes are levied: in case of up to 120,000 AMD monthly wages 24.4%, up to 2 million AMD - 26%, in the case of more than 2 mln AMD - 36%. The new Code proposes somewhat different picture. In case of up to 120,000 AMD monthly wages, 23% is levied, up to one million AMD - 28%, and in the case of more than one million AMD - 33%. In this case the progressiv tax is applied not starting from two million AMD, but one. "The problem is that if the tax rates are raised, then this will lead to the incomplete declaration of wages. If taxpayers have the option to declare their salaries incompletely, they will do so," V. Hambardzumyan said.
Atom Margaryan, Dean of the Faculty of Regulation of Economy and International Economic Relations at the Armenian State Economic University, said that the Tax Code is not only financial document regulating the relations between the state and the taxpayer, but also a political document, as it should be adopted by consensus. "60 and a little more percentage of deputies voted in favor of the Code in the first reading, which does not form a consensus. If it subsequently fails to form it, the tax code will not work," he said.
Armen Yesoyan, “NGO of Taxpayers and Business Rights Protection”, speaking of the impact of the Tax Code on the taxpayer, said that first of all the opinion that tax is an irretrievable fee needs to be changed. "We have to define that the tax is such a fee for which the state is committed to providing honest administration, competition, etc. These provisions are involved in the Code," Yesoyan said, noting that the issue of conscientious administration and spending of public funds rationally should be resolved, otherwise the gap of trust between taxpayers and the state will deepen.
In terms of reducing or increasing the tax burden Yesoyan said that about 19 types of taxes and obligatory payments are stipulated in the Code that need to be cut. "Our approach is that the types of taxes and obligatory payments should decrease. they should not be less than ten." In addition he has serious concerns about the issue that an employee of the tax authorities has the right to bear arms and this is stipulated in the draft Tax Code and later in the law. "I do not see the importance of it, and I think that will change," he said.
Arshaluys Mghdesyan, editor/events coordinator at “Media Center”
To contact the author please send an email to email@example.com.