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“Currently, there are tax benefits for those economic entities of the IT sector, whose number of employees does not exceed 30. They are exempt from profit tax until December 31, 2022, and the income tax rate is 10%. Taking into account the fact that there is a flow of IT specialists from the Russian Federation, new mechanisms and new directions of support are needed to maintain the competitiveness of the country. The special tax regime, defined for up to 30 employees, is aimed at newly established small start-ups, which creates a shadow, preventing the possibility of development. The economic entity prefers to stay small in order to take advantage of the tax exemption. There are better conditions in a number of countries, and it is not excluded that IT specialists who came to the Republic of Armenia may go to a third country,” Vagharshak Hakobyan, the Deputy Chair of the Committee, noted at the sitting of the NA Standing Committee on Regional and Eurasian Integration on September 6.

Now, they propose to extend the favorable tax regime not only among small employees, but to the entire IT sector. It is proposed to exempt microbusinesses from taxes.

The deputy Khachatur Sukiasyan said that the purpose of the proposals presented by the Committee is to create a competitive platform. According to him, the tax burden should be reduced, which will lead to a more competitive platform.

The Deputy Chair of the NA Standing Committee on Economic Affairs Babken Tunyan, emphasizing the importance of the theme, noted that tax benefits are an effective way to achieve specific goals. “Recently, the Government has been gradually phasing out tax benefits so that the tax field is not distorted. But on the other hand, if we want to single out any sector, it should be done with a tax system that is attractive when competing with other countries. I will not reveal a secret, the results of the survey already prove that, one of the main factors of people coming to Armenia is the society’s attitude towards them, then the other things come. There are also circumstances that impede, but we should not rely only on good attitude, delicious food or knowledge of Russian. As a business, we should provide such conditions for those people that they do not think about moving from Armenia. If we do not use this resource properly, it will mean to missing the moment,” Babken Tunyan noted.

“For about a year, work has been carried out on drafting the draft law, a working group was created with the participation of representatives of organizations and field lawyers. The views and suggestions of the interested sides were collected,” the RA Deputy Minister of High-Tech Industry Davit Sahakyan noted. The concept “authorizing norm” was included in the draft law. It is planned to develop additional state support programs. It is envisaged to increase the threshold of 30 employees to 50. Davit Sahakyan stated that, according to the draft, the period of tax benefits of companies received a patent from February 1, 2018 will be extended by 5 years.

According to the RA Deputy Minister of Finance Arman Poghosyan, Armenia is a member of a number of international structures, and the tax system of our state should not create problems for the member countries.

Vagharshak Hakobyan expressed his belief that as a result of joint work, it will be possible to have a competitive law, recording great achievements in the field. It was noted that new debates will be jointly organized with the RA NA Standing Committee on Economic Affairs in the near future.