The Armenian government is discussing changes to a controversial tax reform that the parliament passed in first reading in June, Radio Free Europe/ Radio Liberty's (RFE/RL) Armenian service reported on August 30.
The reform will be subjected to a second reading in the fall. If it passes, it will be enforced gradually in three to five years, according to lawmakers. The International Monetary Fund (IMF) advised Yerevan to push for structural reforms, which include higher tax collections, in a June review.
The bill would increase income tax for those earning over AMD120,000 (€223) per month from 26% to between 28% and 33%, while decreasing the income tax for those earning AMD2mn or more from 36% to 33% and for those earning AMD120,000 or less from 24.4% to 23%. Opposition parties, some pro-ruling party lawmakers and business associations have opposed the bill, claiming that it would seriously affect the private sector.
Prime Minister Hovik Abrahamyan promised “reasonable” amendments to the tax code in a parliamentary debate on August 30, before the reform is passed in September, and said that he is discussing the issue with his cabinet.
Tax collections in Armenia have increased in recent years, but remain low at one fifth of GDP, below its regional peers. Widespread tax evasion and corruption are believed to be the reasons behind the country's poor tax collection track record.
Don’t just follow the news—understand it.
The IntelliNews PRO service includes access to reports, exclusive market data, and more news that decision-makers care about. Stay ahead of the market with IntelliNews PRO.
Sign Up NowRelated Articles
Iran industry minister says central bank should not interfere in trade policy
Iran's industry minister has said the central bank should be stripped of its role in trade policy, blaming foreign exchange interventions for constraining exporters and creating challenges for ... more
Eurasian Development Bank redeems €286mn Eurobond
The Eurasian Development Bank (EDB) said on March 26 it had fully redeemed a five-year Eurobond, meeting all obligations to investors at maturity. The bank paid a total of €286mn, covering both ... more
IndiGo cancels Central Asian flights until late February over Iran tensions
Indian budget carrier IndiGo has cancelled all flights to and from Tbilisi, Almaty, Baku and Tashkent until February 28 due to the developing situation around Iran, the airline announced on February ... more