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MP from Prosperous Armenia Party: Armenian Government has set tax
officials against SMEs again
by Gayane Isahakyan
Sunday, October 5, 11:29
By adopting the new Law on Turnover Tax, the Armenian Government has
actually toughened the tax administration of small and medium
enterprises again, MP from the Prosperous Armenia Party (PAP) Faction
Mikayel Melkumyan said at today's press conference. According to the
law, the document control has become compulsory for these entities.
He said that in case of compulsory document control the tax audits of
SMEs will become inevitable some time, because the given law aims to
reveal the real turnover of the enterprises and, consequently, to
increase the tax revenues. "If these revenues do not grow, the tax
officials will have to check the documents on turnover of the economic
entities", he said.
Melkumyan added that today the ban on different types of inspection of
SMEs has been cancelled. The ban was imposed in 2009. The new law
authorizes the tax inspectorate to check the documents of SMEs.
He pointed out that the PAP voted for the bill in the first reading,
because the bill stipulated reduction of the turnover tax for SMEs
from 3.5% to 1%. The party also demanded revising the provision on
compulsory document control in the second reading. "However, the
Government took no decisions to change that provision even following
the two-day talks. Only the Minister of Finance signed a decree on
abstention from ungrounded inspections of SMEs, except for the risky
cases", he said.
According to Melkumyan's estimations, with introduction of compulsory
document control, the SMEs' turnover will exceed 100 mln AMD and they
will have to pay VAT. "As a result, the turnover tax will reach 8%,
and this will lead the enterprises to bankruptcy", he stressed.
To remind, starting 1 October 2014, the turnover tax for economic
entities engaged in the field of trade will be reduced from 3.5% to
1%. A status of the family business will be introduced. The economic
entities having up to 12 million drams annual turnover will be
registered as family business and exempted from taxes. Starting 1
January 2015, the following types of responsibility will be applied to
SME: a warning for violation of the law, a 20,000 AMD fine for
repeated violation and a 5% turnover tax for a third case of
violation. The economic entities violating the Law on Turnover Tax for
the 4th time will occur in the field of VAT. Starting 1 Jan 2016, a
SME having no document flow will have to pay the tax at a higher rate
- 5%. VAT tax will be charged, if an economic entity fails to submit
document flow for a second time. Alongside with this, a system
"law-abiding taxpayer" will be introduced. The system implies that SME
will get out of the shadow and start submitting the necessary
documents to the taxation bodies. The responsibility for violation of
the given law and mechanisms of control over administrative violations
will be toughened as well.
http://www.arminfo.am/index.cfm?objectid=573B99E0-4C61-11E4-A0060EB7C0D21663
officials against SMEs again
by Gayane Isahakyan
Sunday, October 5, 11:29
By adopting the new Law on Turnover Tax, the Armenian Government has
actually toughened the tax administration of small and medium
enterprises again, MP from the Prosperous Armenia Party (PAP) Faction
Mikayel Melkumyan said at today's press conference. According to the
law, the document control has become compulsory for these entities.
He said that in case of compulsory document control the tax audits of
SMEs will become inevitable some time, because the given law aims to
reveal the real turnover of the enterprises and, consequently, to
increase the tax revenues. "If these revenues do not grow, the tax
officials will have to check the documents on turnover of the economic
entities", he said.
Melkumyan added that today the ban on different types of inspection of
SMEs has been cancelled. The ban was imposed in 2009. The new law
authorizes the tax inspectorate to check the documents of SMEs.
He pointed out that the PAP voted for the bill in the first reading,
because the bill stipulated reduction of the turnover tax for SMEs
from 3.5% to 1%. The party also demanded revising the provision on
compulsory document control in the second reading. "However, the
Government took no decisions to change that provision even following
the two-day talks. Only the Minister of Finance signed a decree on
abstention from ungrounded inspections of SMEs, except for the risky
cases", he said.
According to Melkumyan's estimations, with introduction of compulsory
document control, the SMEs' turnover will exceed 100 mln AMD and they
will have to pay VAT. "As a result, the turnover tax will reach 8%,
and this will lead the enterprises to bankruptcy", he stressed.
To remind, starting 1 October 2014, the turnover tax for economic
entities engaged in the field of trade will be reduced from 3.5% to
1%. A status of the family business will be introduced. The economic
entities having up to 12 million drams annual turnover will be
registered as family business and exempted from taxes. Starting 1
January 2015, the following types of responsibility will be applied to
SME: a warning for violation of the law, a 20,000 AMD fine for
repeated violation and a 5% turnover tax for a third case of
violation. The economic entities violating the Law on Turnover Tax for
the 4th time will occur in the field of VAT. Starting 1 Jan 2016, a
SME having no document flow will have to pay the tax at a higher rate
- 5%. VAT tax will be charged, if an economic entity fails to submit
document flow for a second time. Alongside with this, a system
"law-abiding taxpayer" will be introduced. The system implies that SME
will get out of the shadow and start submitting the necessary
documents to the taxation bodies. The responsibility for violation of
the given law and mechanisms of control over administrative violations
will be toughened as well.
http://www.arminfo.am/index.cfm?objectid=573B99E0-4C61-11E4-A0060EB7C0D21663