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It is planned to reduce the difference between the existing tax burden in the general taxation system and the tax burden in the turnover tax system. The government has come up with a corresponding legislative initiative


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A regular Cabinet meeting took place today, chaired by Prime Minister Nikol Pashinyan.

The Government approved the bills on amendments and additions to the Tax Code of the Republic of Armenia and related laws. The need to adopt the bills stems from the objectives of reducing the difference between the tax burden of the turnover tax system and the general taxation system, increasing the incentives for documenting the expenses incurred by business entities, as well as making the two taxation systems for SMEs more targeted. The bills propose revising the turnover tax rates for the main types of activities, while providing the opportunity to reduce the payable tax through documented expenses.

Finance Minister Vahe Hovhannisyan specifically noted. "The law on making amendments and additions to the Tax Code of the Republic of Armenia proposes to revise the turnover tax rates and reduce the difference in the tax burden between taxation systems. namely, to increase the current sales tax rates for the main types of activities, basically by double. A possibility to reduce the amount of turnover tax on the basis of costs justified by documents should also be planned for the production and service sectors, which is not planned now, creating an opportunity so that the final rate of sales tax for taxpayers providing a high level of documentation of acquisitions is practically lower than the current rates; for example, setting 1 percent instead of 1.5 percent in commercial activities, setting 3 percent instead of 3.5 percent in manufacturing, 3.5 percent instead of 4 percent in the case of public catering, and 4.5 percent instead of 5 percent in other types of activities. In addition, it is planned to reduce the range of alternative taxation systems. In particular, to establish that notary, lawyer and lotteries activities cannot be carried out in the sales tax system. Secondly, to establish that the mentioned types of activities cannot be carried out in the micro-enterprise system and must be transferred to the turnover tax or VAT system," said the minister.

Commenting on the bills, Nikol Pashinyan, in particular, noted: "It is time to state very clearly and voice our conclusion that the turnover tax system deforms the economy in general and creates wrong motivations, because our economic policy and tax policy should be such that it promotes the growth of people. Our strategy is as follows: we must phase out the turnover tax system altogether. This is an important goal for us to set the right motivations for business."

The Government has approved the bills on Police Guards and related bills. As a result of the adoption of the bill, a purely police service will be created with new weapons and trained personnel in accordance with international standards, which will be entrusted with the maintenance of public order and public safety, the protection of state buildings and important facilities, the escorting of delegations provided for by the state protocol, as well as the provision of the legal regime of the martial law and state of emergency, as well as other functions.

The bill defines the status, structure, tasks and functions of the Police Guard, the rights and duties of the guards, including the cases, grounds and proportionality conditions for the use of force by them, as well as the specifics of training of the police guards. Nikol Pashinyan noted that the project is another very important package of police reforms.

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