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At the extraordinary discussion of the working group of the Small and Medium Entrepreneurs (SMEs) adjunct to the NA Standing Committee on Economic Affairs held on February 7, reference was made to the tax amendments regarding the SMEs.

The MPs. members of the Government, representatives of the SME sector participated in the discussion.

The Chairman of the SME Cooperation Association Hakob Avagyan voiced the dissatisfaction of the beneficiaries regarding the amendments adopted in the Tax Code. According to him, in 2023, the turnover taxpayers will have to keep records of their product balance and warehouse with the amendments to the Tax Code initiated by the State Revenue Committee. Otherwise, they will be fined. “This was followed by a legislative package adopted by the National Assembly in June 2024, which doubled the turnover tax rate,” the rapporteur underscored and added that the amendment refers to the activities of more than 55.000 entities.

Hakob Avagyan quoted the decision made by the Government in 2020, according to which, it is mandatory that impact assessments be conducted before laws are adopted. Hakob Avagyan also underlined that public debates on the amendments entered into force from 1 January 2025, were not organized. The head of the Association proposed postponing the entry into force of the laws by six months, as well as considering it necessary to conduct widespread awareness-raising.

According to the entities, as a consequence of the tax amendments, the product price will increase, the consumption will decrease, and the sphere will experience a decline. As the gold trader insisted, 90 percent of gold sales are provided by foreign buyers.

In this context, the RA Deputy Minister of Finance Arman Poghosyan noted that the representatives of the sector should consider using various tools proposed by the legislation. The Government representative urged business operators to be exempt from the value added tax (VAT) by applying the Tax free system. The Deputy Minister emphasized that the Government is discussing the issue of making the value added tax system attractive for jewelry and diamond processing.

The next regulation in the legislative toolkit concerns the sales carried out with documentation. According to Hamlet Sahakyan, the Deputy Chairman of the State Revenue Committee (SRC), sales with documentation can even be profitable for the seller. “As a result of the change, even if the price of raw materials increases with documentation, it may result in the tax being paid not at 5 percent, but at 1 or 2 percent,” the rapporteur underlined.

The Deputy Chair of the Standing Committee on Economic Affairs Babken Tunyan emphasized similar discussions and noted that during the meeting, which lasted several hours, the business owners presented their problems and observations, some of which were clarified. Some proposals will also be inventoried and discussed with the government partners. The MP assured that the Government does not aim to increase the budget revenues with the amendments. “The budget should serve the economy and stem from economic policy. If certain problems arise, they are debated,” concluded Babken Tunyan.