At the government meeting held on May 2, a package of draft laws aimed at doubling the turnover tax and introducing restrictions for certain industries was approved.
Prime Minister Nikol Pashinyan emphasized the need for a gradual abandonment of the turnover tax system. According to the approved amendments, the turnover tax will double and amount to 10% instead of the current 5%.
Finance Minister Vahe Hovhannisyan expressed dissatisfaction with the preferential tax system of the turnover tax, noting that the overall tax burden in most sectors significantly exceeds this type of tax.
As part of the package of draft laws, the Ministry of Finance also proposed to limit entrepreneurs in certain directions where they could use the turnover tax and operate as micro-enterprises. Among these directions are notarial, legal, lottery activities, as well as services related to buying and renting real estate, hairdressing, body care, technical maintenance, construction, real estate appraisal and measurement, sauna, bath, and solarium organization.
The increase in the tax threshold, as stated in the justification of the legislative initiative, will allow the government to increase state revenues by 17.8 billion drams (over $23 million).
Finance Minister Vahe Hovhannisyan also noted that more than 50,000 taxpayers paid only 2.3% of taxes in Armenia in 2023, which is a low indicator.
