– Has the Government already raised the new tax package, will it be discussed in the next week’s full session of the National Assembly. It was likely to be informed that in the course of discussions the Executive Power has delayed the major package for several times and made number of changes in it, wasn’t it?
– Monday onwards we will get the final package. Around 21 laws have been modified, some of which will be included into the package. I am sure we will discuss the package on Monday, as it has already been finalized. One and half month activities resulted positively on the package. The initial version has been changed a lot.
– What positive results have you achieved?
– It is quite positive that the small and medium businesses are released from formerly existing tax obligations/ liabilities. The package proposes to cover also big businesses and luxury tax obligations/ liabilities.
– In its premiere version, for instance, the social security payments were proposed to increase, as well as excise tax for wine, vodka and beer of local production for 50%, along with presumptive taxes for public foodstuff in private objects, gaming houses, fueling stations. Have such taxes been preserved?
– 90% of them has been removed, there is no tax on wine production, as it is a traditional production, there is no tax on cognac either. Excise taxes for beer, alcohol and imported expensive vodkas have been increased. In their parties vulnerable classes mainly use inexpensive vodka of local production. If you want to live a luxurious life, pay more taxes.
– Is the luxury tax displayed in any other products, besides the vodkas?
– Yes, for example, a car costing more than 90 K USD or having 350 horsepower should be taxed for 20%. Presumptive tax will not increase for public snack bars of up to 50 sq/m area. In case the area is more that 50 sq/m only slight changes will be added. Here we suggest importing a zonality index as well in order to distinguish Yerevan and regional areas. Increasing presumptive tax in the fueling stations has been removed. The tax will increase for 5% in case of more that 2 million AMD profit.
– Recently Armen Alaverdyan, deputy head of State Revenue Committee declared the cost of this tax package to be 10-14 billion AMD. However, in its initial version it was supposed to be more that 45 billion AMD plus the tax collections. Thus, factually in the result of changes the “package cost” decreased by 30 billion AMD, didn’t it?
– They say the NA adopts the law forms suggested by the same Government in their initial versions. But this example came to prove that it is not really so, but the outcome of intensive work (even up to the RA President’s level), mutual agreements and discussions. People only see when the law was proposed and adopted. It is very difficult to say what the law has passed through. In any case the Government tries to claim on more tools from the National Assembly, and the later restrains that wish. Political leadership accepts the right variant too. This is one of such examples. During the discussions with the Government we reached an interim version, and the anticipated taxes decreased from the previous 46 billion AMD, and the rest of the burden was left to be reduced by luxury, major tax payers, and shadow reduction.
– In case of lithosphere package also only 2-3 billion AMD additional tax collection are anticipated. Whereas, Hrant Bagratyan, former prime-minister considered that figure should be much higher as the mining/ mine exploitation volumes and international costs of ore mining are sharply increasing.
– No, he only linked that with royalty payments, for which 19 billion AMD was paid only last year and this year it was 21 billion. However, for instance if I sell more, I will not only pay royalty, but also I have to pay a profit tax, VAT and other taxes. As per initial calculations around 3-4 million AMD more calculations are anticipated, and in my opinion it will be much more. And as per final calculations the increase will be evident in income tax, profit tax and other taxes.
– When the Government declared that it is going to collect 101 billion AMD taxes more (the tax package was just proposed) and it was estimated as 45-46 billion AMD. Now the package cost is decreased up to 14 billion AMD. How credible is 101 billion AMD tax collections in this case?
– Then how you would comment on Gagik Khachatryan President of State Revenue Committee statement that 101 billion AMD more tax collection is not realistic, even it is risky?
– In all the cases the budget is a predicted document, but the predictions are based only on the true calculations. They simply contribute to such risky zones which are believed to cause problems in terms of income.
– Once this 101 billion AMD is managed to collect, it is forecasted that the GDP/ taxes correlation will reach from 16.9-17.5 percent. Don’t you think this is a very low index and shows that the shadow is considerably big in Armenian economy?
– If we add also the pension funds to this, which are another type of taxes, it will make around 21%, and if the administrative tools application towards the GDP gives only 2-3%, we will have a serious development. Entire agricultural sphere is not taxed, whereas it makes only 13% in the GDI. It is a problem. Nevertheless, the Government has tried to preserve the symmetry in its project plans and interim projects.