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TOOTHACHE: DENTISTS/REALTORS DECRY NEW LAW ON TAXATION
Health | 04.02.13 | 15:41
By Gayane Lazarian
ArmeniaNow reporter
Dentists and real estate agents in Armenia are unhappy with the changes
in the law on License Payments that has come into force early this
year implying sharp increase of their tax burden.
By the new law, three (or more)-chair dentist clinics have to
pay 80,000 drams (some $200) per chair, instead of the previous
15,000-20,000 ($37-49).
President of Armenia's Dentist Union Ashot Gevorgyan says that
if before an 11-chair dentist clinic was paying 2 million drams
(around $5,000) income tax, now it has to pay 8.5 million drams
(around $21,000).
"By this law we are on the same list with casinos and beauty salons.
If this approach referred to healthcare, then this tax would have
to apply to hospital beds as well. In global terms healthcare is
VAT-free, as provided for by Point 2 of this law, hence we are
indirectly separated from healthcare," he says.
Despite healthcare minister Derenik Dumanyan's statement that the
legislative changes have been initiated by the finance ministry without
considering expert opinions of this sphere, Republican Gagik Minasyan
chairing the National Assembly's Standing Committee on Financial-Credit
and Budgetary Affairs, claims the professionals working in this sphere
were aware of the changes.
Minasyan believes 80,000 dram (roughly $200) tax is not much:
"Dentist clinics work 24 days a month by two shifts per day; that is
48 shifts per month in total. If we divide 80 by 48, it makes 1,700
drams ($4) per daily shift. And that's not much. And this is also
aimed at fighting the 'shadow economy'," says Minasyan.
Will the new tax document, indeed, address the "shadow"? Dentists
claim quite the opposite.
Economy minister Tigran Davtyan says on the one hand tax policy is
a tool to create favorable conditions for economic entities, and on
the other, it is a means of replenishing the state budget.
"It's unlikely for such a document to be perfect for either side, and
the document we have at hand, I believe, keeps the balance," he says.
Around 1,200 dentists met at the American University of Armenia
and stated that if the law is not reconsidered, those clinics that
are renting their premises would have to shut down, and the best
specialists will simply migrate to other countries. They also pointed
out that the new law is damaging to "dental tourism", as Armenia is
the leader by its highly qualified dentists and technical equipment
among the post Soviet countries. Many tourists prefer to solve their
dental issues while in Armenia.
Dentist Maro Lazarian wonders if the state has any idea about the
hardships her colleagues face: "Don't they know how many dentists over
these years have turned to embassies to leave Armenia? Many have bank
loans. Do they know how many dentists borrow the necessary substances
form shops? Do they know how difficult it has been to get it started;
how our parents had to sell their property to pay for our education
[medical education is the most expensive in Armenia], and then to
make the initial investment to help us start?"
Dentists of Armenia have drafted a package suggesting amendments to
the law on License Payments. After the final draft is ready it will
be submitted to the National Assembly.
(There have been speculations in the press that Republican MP Samvel
Alexanyan is planning to open a dentist clinic chain and this new
law is aimed at "making his task easier" by damaging the other clinics.
Alexanyan owns Natali Farm pharmacological importer, as well as flour,
sugar, and forage import monopolies.)
The changes in the law have stirred discontent also among realtors,
which now have to pay the state some $150 per employee per month.
To protect their interests, an Initiative Group of Real Estate Agencies
has been created, which is now collecting signatures for a petition
against the new changes in the law and has addressed an open letter
to the president.
Real estate agencies used to be taxed 5 percent from their turnover.
However, today, without public discussions and expert opinions, they,
too, have been included on the list of companies to which the new law
is applicable, and have to make 60,000 drams ($150) license payment
per each employee, instead of the former 15-20, 000 drams ($37-49).
Ar-Go Realty manager Arayik Gojabashyan says if the law isn't changed,
the shadow will, in fact, grow.
According to him, many in this sphere were starting to work clean,
with proper registration of their employees, paying the taxes, showing
their true turnover, and now people are forced to work "outside the
legal field".
"No doubt there will be those who will, because there is no
alternative. The other option would be to shut down and leave the
country," he says.
By official data, the real estate market has undergone some 20
percent decline in its activities in 2012 as compared to 2007. If
the law stands as it is now, the companies will have to make license
payments for January and February at once, as well as for March
in late February, which means, as they say, paying from the yet
non-existent income.
Heads of a few dozen related entities have addressed a letter to the
president of Armenia, the prime minister and the finance minister.
http://armenianow.com/society/health/43117/armenia_dentist_union_law_dentistry_real_estate
Health | 04.02.13 | 15:41
By Gayane Lazarian
ArmeniaNow reporter
Dentists and real estate agents in Armenia are unhappy with the changes
in the law on License Payments that has come into force early this
year implying sharp increase of their tax burden.
By the new law, three (or more)-chair dentist clinics have to
pay 80,000 drams (some $200) per chair, instead of the previous
15,000-20,000 ($37-49).
President of Armenia's Dentist Union Ashot Gevorgyan says that
if before an 11-chair dentist clinic was paying 2 million drams
(around $5,000) income tax, now it has to pay 8.5 million drams
(around $21,000).
"By this law we are on the same list with casinos and beauty salons.
If this approach referred to healthcare, then this tax would have
to apply to hospital beds as well. In global terms healthcare is
VAT-free, as provided for by Point 2 of this law, hence we are
indirectly separated from healthcare," he says.
Despite healthcare minister Derenik Dumanyan's statement that the
legislative changes have been initiated by the finance ministry without
considering expert opinions of this sphere, Republican Gagik Minasyan
chairing the National Assembly's Standing Committee on Financial-Credit
and Budgetary Affairs, claims the professionals working in this sphere
were aware of the changes.
Minasyan believes 80,000 dram (roughly $200) tax is not much:
"Dentist clinics work 24 days a month by two shifts per day; that is
48 shifts per month in total. If we divide 80 by 48, it makes 1,700
drams ($4) per daily shift. And that's not much. And this is also
aimed at fighting the 'shadow economy'," says Minasyan.
Will the new tax document, indeed, address the "shadow"? Dentists
claim quite the opposite.
Economy minister Tigran Davtyan says on the one hand tax policy is
a tool to create favorable conditions for economic entities, and on
the other, it is a means of replenishing the state budget.
"It's unlikely for such a document to be perfect for either side, and
the document we have at hand, I believe, keeps the balance," he says.
Around 1,200 dentists met at the American University of Armenia
and stated that if the law is not reconsidered, those clinics that
are renting their premises would have to shut down, and the best
specialists will simply migrate to other countries. They also pointed
out that the new law is damaging to "dental tourism", as Armenia is
the leader by its highly qualified dentists and technical equipment
among the post Soviet countries. Many tourists prefer to solve their
dental issues while in Armenia.
Dentist Maro Lazarian wonders if the state has any idea about the
hardships her colleagues face: "Don't they know how many dentists over
these years have turned to embassies to leave Armenia? Many have bank
loans. Do they know how many dentists borrow the necessary substances
form shops? Do they know how difficult it has been to get it started;
how our parents had to sell their property to pay for our education
[medical education is the most expensive in Armenia], and then to
make the initial investment to help us start?"
Dentists of Armenia have drafted a package suggesting amendments to
the law on License Payments. After the final draft is ready it will
be submitted to the National Assembly.
(There have been speculations in the press that Republican MP Samvel
Alexanyan is planning to open a dentist clinic chain and this new
law is aimed at "making his task easier" by damaging the other clinics.
Alexanyan owns Natali Farm pharmacological importer, as well as flour,
sugar, and forage import monopolies.)
The changes in the law have stirred discontent also among realtors,
which now have to pay the state some $150 per employee per month.
To protect their interests, an Initiative Group of Real Estate Agencies
has been created, which is now collecting signatures for a petition
against the new changes in the law and has addressed an open letter
to the president.
Real estate agencies used to be taxed 5 percent from their turnover.
However, today, without public discussions and expert opinions, they,
too, have been included on the list of companies to which the new law
is applicable, and have to make 60,000 drams ($150) license payment
per each employee, instead of the former 15-20, 000 drams ($37-49).
Ar-Go Realty manager Arayik Gojabashyan says if the law isn't changed,
the shadow will, in fact, grow.
According to him, many in this sphere were starting to work clean,
with proper registration of their employees, paying the taxes, showing
their true turnover, and now people are forced to work "outside the
legal field".
"No doubt there will be those who will, because there is no
alternative. The other option would be to shut down and leave the
country," he says.
By official data, the real estate market has undergone some 20
percent decline in its activities in 2012 as compared to 2007. If
the law stands as it is now, the companies will have to make license
payments for January and February at once, as well as for March
in late February, which means, as they say, paying from the yet
non-existent income.
Heads of a few dozen related entities have addressed a letter to the
president of Armenia, the prime minister and the finance minister.
http://armenianow.com/society/health/43117/armenia_dentist_union_law_dentistry_real_estate