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TOOTHACHE FOR ARMENIAN AUTHORITIES
Vestnik Kavkaza, Russia
Feb 22 2013
David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza
It seems that the intention of the Armenian authorities to increase
the tax burden in 2013 is being implemented from January 1. At the
end of the last year the Head of the Committee for State Expenses,
Gagik Khachatryan, announced that tax revenues should increase to
118 billion drams, although the 108 billion drams in 2012 already
provoked enormous dissatisfaction among the citizens. Armenian dentists
became the first target of the Armenian tax inspectors. This field
is relatively developed in Armenia, and people come from the entire
CIS for cheap and high quality dental treatment. According to the
information of the Associations of Armenian Dentists, Armenia now has
750 dental centers. Armenia is a leader among European countries in
the number of dentists per capita.
It seems that the success of Armenian dentists did not allow the
Armenian authorities to sleep in peace. Therefore it was decided that
the taxes paid by dentists should be increased several times.
According to the new tax package adopted by the Parliament late in
2012, the dental clinics should pay taxes on each chair. The clinics
of Yerevan will pay 60-100 thousand drams (150-250 dollars) for each
chair per month. 100 drams will be paid by clinics in the center of the
city, and others 60-80 drams. If the clinic has less than 3 chairs,
the tax is 60-100 thousand drams, if more than than 3, then it is 48
thousand drams per chair. Previously it was only 15 thousand drams
(35 dollars) per month.
The other victims of the tax inspectorate (although to a lesser extent)
include real estate agents, employees of beauty salons and lawyers,
who should now pay 24.5% tax instead of 10%.
Obviously, this inappropriate move provoked a riot. Dentists
held a protest in front of the government building, demanding
the reconsideration of the tax changes. Earlier they held similar
actions in front of the presidential palace and the building of
the Armenian Parliament. The dentists claim that because of this
inappropriatetaxation, many of them will have to cease their business,
taking into account fluctuations in profitability, because dental
services have a seasonal character. Dentists also believe that
this will also cause at least a 50% increase in the costs of dental
services, which will affect their clients. Physicians said that the
innovation is like a cultural anaesthesia that will be followed by
a new law for insuring the public health system.
The main issue is not only the increase of taxation but its structure.
Everyone understands that this structures creates conditions for
the developments of the new Armenian monopoly integrated with the
authorities. Today in Armenia almost all spheres of the economy have
been monopolized - retail, import, public health, energy distribution,
drinking water supply, banking, etc. The increased taxation of the
dentists revealed a new potential monopoly. The dentists have already
argued that the new law was aimed at pushing out the small clinics
and the promotion of the large clinics supported by the government.
To put it differently, the changes to the tax inspection are aimed
at increasing the tax burden for small and medium-size businesses in
favor of the big monopolies. It became a logical continuation of the
policy carried out by the government for cooperating with oligarchs
and defending their interests. Independent experts claim that small
clinics are forced to leave the market. Dentists confirm that this
pressure started last year with numerous check-ups and inspections
that forced many private clinics to close.
The leaders of the small Yerevan clinics claim that all these
efforts were made in favor of the biggest dental center in Armenia,
Natalie-Dent, that should open soon. The center belongs to an MP from
the ruling party, oligarch Samvel Aleksanyan. In this situation the
dentists have a dilemma - they can either get employed by Aleksanyan
or leave the country in search of a better life abroad. It is clear
that Armenian dentists will use the old and well-established second
option. Several dozen dentists have shut down their clinics and moved
abroad, mostly to Russia.
Yet on February 8 the prime minister, Tigran Sarkisyan, beaming with
his snow-white smile, told journalists that "no dentist will leave
Armenia because of the new tax." He is convinced that businessmen are
not intending to leave the country "because of their high profits
here." He also excluded the possibility that the price of dental
services will increase. Sarkisyan advised the dentists to study the
experience of taxi drivers, whose tax-burden is even higher...
http://vestnikkavkaza.net/analysis/economy/37338.html
.
Vestnik Kavkaza, Russia
Feb 22 2013
David Stepanyan, Yerevan. Exclusively to Vestnik Kavkaza
It seems that the intention of the Armenian authorities to increase
the tax burden in 2013 is being implemented from January 1. At the
end of the last year the Head of the Committee for State Expenses,
Gagik Khachatryan, announced that tax revenues should increase to
118 billion drams, although the 108 billion drams in 2012 already
provoked enormous dissatisfaction among the citizens. Armenian dentists
became the first target of the Armenian tax inspectors. This field
is relatively developed in Armenia, and people come from the entire
CIS for cheap and high quality dental treatment. According to the
information of the Associations of Armenian Dentists, Armenia now has
750 dental centers. Armenia is a leader among European countries in
the number of dentists per capita.
It seems that the success of Armenian dentists did not allow the
Armenian authorities to sleep in peace. Therefore it was decided that
the taxes paid by dentists should be increased several times.
According to the new tax package adopted by the Parliament late in
2012, the dental clinics should pay taxes on each chair. The clinics
of Yerevan will pay 60-100 thousand drams (150-250 dollars) for each
chair per month. 100 drams will be paid by clinics in the center of the
city, and others 60-80 drams. If the clinic has less than 3 chairs,
the tax is 60-100 thousand drams, if more than than 3, then it is 48
thousand drams per chair. Previously it was only 15 thousand drams
(35 dollars) per month.
The other victims of the tax inspectorate (although to a lesser extent)
include real estate agents, employees of beauty salons and lawyers,
who should now pay 24.5% tax instead of 10%.
Obviously, this inappropriate move provoked a riot. Dentists
held a protest in front of the government building, demanding
the reconsideration of the tax changes. Earlier they held similar
actions in front of the presidential palace and the building of
the Armenian Parliament. The dentists claim that because of this
inappropriatetaxation, many of them will have to cease their business,
taking into account fluctuations in profitability, because dental
services have a seasonal character. Dentists also believe that
this will also cause at least a 50% increase in the costs of dental
services, which will affect their clients. Physicians said that the
innovation is like a cultural anaesthesia that will be followed by
a new law for insuring the public health system.
The main issue is not only the increase of taxation but its structure.
Everyone understands that this structures creates conditions for
the developments of the new Armenian monopoly integrated with the
authorities. Today in Armenia almost all spheres of the economy have
been monopolized - retail, import, public health, energy distribution,
drinking water supply, banking, etc. The increased taxation of the
dentists revealed a new potential monopoly. The dentists have already
argued that the new law was aimed at pushing out the small clinics
and the promotion of the large clinics supported by the government.
To put it differently, the changes to the tax inspection are aimed
at increasing the tax burden for small and medium-size businesses in
favor of the big monopolies. It became a logical continuation of the
policy carried out by the government for cooperating with oligarchs
and defending their interests. Independent experts claim that small
clinics are forced to leave the market. Dentists confirm that this
pressure started last year with numerous check-ups and inspections
that forced many private clinics to close.
The leaders of the small Yerevan clinics claim that all these
efforts were made in favor of the biggest dental center in Armenia,
Natalie-Dent, that should open soon. The center belongs to an MP from
the ruling party, oligarch Samvel Aleksanyan. In this situation the
dentists have a dilemma - they can either get employed by Aleksanyan
or leave the country in search of a better life abroad. It is clear
that Armenian dentists will use the old and well-established second
option. Several dozen dentists have shut down their clinics and moved
abroad, mostly to Russia.
Yet on February 8 the prime minister, Tigran Sarkisyan, beaming with
his snow-white smile, told journalists that "no dentist will leave
Armenia because of the new tax." He is convinced that businessmen are
not intending to leave the country "because of their high profits
here." He also excluded the possibility that the price of dental
services will increase. Sarkisyan advised the dentists to study the
experience of taxi drivers, whose tax-burden is even higher...
http://vestnikkavkaza.net/analysis/economy/37338.html
.