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Armenian government may not have time to reduce income tax by January 1, 2019

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17.10.2018
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Changes in the Tax Code of Armenia, in particular, in the area of income tax, can occur not from January 1, as previously planned by the government, but for example, from May 1 or June 1 of next year.

This was stated on October 16 by the Chairman of the State Revenue Committee (CGD) of Armenia David Ananyan, commenting on ArmInfo on the prospect of tax changes in the light of the expected dissolution of the legislative body in the near future.  "Political events have led to such lightning-fast changes that, yes, perhaps, we will not have changes from January 1, and, say, from May 1 or June 1," he said.  Nevertheless, as pointed out by David Ananyan, the Cabinet of  Ministers adheres to a clear position in terms of lowering the tax burden on capital and income.  "Just by January 1, I think we will not have time," he said.  Recall that on September 6 of this year.  Prime Minister Nikol Pashinyan presented two options for changing the income tax rate, stressing that the people should make a choice. The first option proposed by the new Cabinet implies a 3% reduction in the income tax rate to 20% on wages to 250 thousand drams, and for those who receive more, the rate from the current 28% and 36% will drop to 25%. The second scenario of changes - provides for the introduction of a flat scale of taxation, where, regardless of the size of the salary, a 23% income tax and a profit tax plus a dividend tax of 23% (18% + 5%) are charged.  As David Ananyan pointed out on  September 10, the reduction of income tax to 23% will be the beginning of the path, the so-called Starting point, which, after a  certain "X" period, will begin to gradually decline.  According to  Ananyan, in the scenario of tax reforms proposed by the Cabinet of  Ministers, there is a clear intention to reduce the income tax rate.  How quickly this will be done - a year at 0.1% or 0.5% - is still unknown today. "At this stage, presented by the prime minister, the second option of revising income tax rates in the framework of the introduction of a flat scale, aims to reduce the" shadow "in the economy and make it more accountable to the tax authority. Then, when the financial authorities of the country have a clear idea of the real incomes of local business it will become clear exactly how and at what speed the income tax rate can be reduced to the cherished  20%. At present, there is no need to talk about reducing the rate immediately to 20%, since this may cause a tax collapse budget system  ", - he said. 

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