Income tax for salaries up to AMD 280 thousand downs upon new Tax Code
New Tax Code is being discussed at NA extraordinary session. Vakhtang Mirumyan, RA SRC Deputy Chairman, while introducing the draft, firstly stated that after the first reading numerous proposals have been received from businessmen, MPs, the majority of which was adopted. V.Mirumyan introduced amendments regarding the rate. Presently 23% rate is proposed in case of salaries comprising AMD 120-150 thousand. “Rates for the income tax, which was much discussed, has been reviewed: 23% rate is offered to implement in case of salaries up to AMD 150 thousand, instead of the threshold up to AMD 120 thousand. This means that 23% will be implemented instead of current 24.4% and 26%,” he said.
According to the RA SRC Deputy Chairman, the second rate—28% is proposed to apply not from AMD 120 thousand to AMD 1 million, and in case of AMD 2 million and more the existent 36% is offered to implement.
V.Mirumyan added, that productive reduction in rates is anticipated: in case of salaries up to AMD 280 thousand, comprising 89.8% of Armenia’s employees (or 550 thousand citizens), will save in income tax. In case of salaries higher than that, rates for income tax have been raised. Upon the first reading it was increased by 4.3%, and in the amended version—by 17.2%, i.e. according to Mirumyan here the burden eases.
The VAT or turnover threshold has also been changed, which, in his words, was defined AMD 40 million by the first reading. Currently the threshold was defined to AMD 58.35 million.
It’s offered not to tax dividends if an investment is made in that enterprise. Vakhtang Mirumyan stated, that as a result of discussions with representatives of construction companies, they realized that there are corruption risks and they leave the existent regulation unchanged.
Penalties for delaying taxes, defined by the tax legislation, are being considerably reduced: it comprised 0.15% upon the existent law, currently it’s defined 0.75%. The Government considers if the taxpayer was disciplined and didn’t manage to pay out of certain reasons, he should be able to continue his activity, and not close the business and leave.
Regarding the excise tax for the production of alcoholic drinks and cigarettes increase of 15% specific rate is anticipated. The final version defines, that specific rates will again raise by 15% per year, however, value rate will be limited by 15%, so that local producers and importers have equal conditions in the market.
By Armine Vardanyan
