Payroll Tax Should Not Burden Entrepreneurs, Says Deputy Finance Minister

A draft amendment to the Tax Code proposes to flatten the income tax to 23 percent, which is expected to gradually decrease to 20 percent. Deputy Finance Minister Arman Poghosyan presented the justifications for this at parliamentary hearings organized by the National Assembly's Committee on Economic Affairs, according to Armenpress.

A representative from a civil society organization inquired about the countries considered when making proposals for a flat income tax and whether they had examined the failures of similar initiatives in Georgia, North Macedonia, and Slovakia.

Deputy Minister Poghosyan stated that in their view, the income tax system should address two main issues: “One is the redistributive function, which I believe is not being implemented in our country. The second is the fiscal aspect. The income tax should be structured in a way that the payroll tax does not burden the entrepreneur, especially those implementing export-oriented business projects,” noted Poghosyan.

Regarding the anticipated inflationary pressure resulting from the proposed changes to the Tax Code, the deputy minister indicated that the effects have been assessed using a general equilibrium model by the Ministry of Finance of the Republic of Armenia. He claimed that the inflationary pressures are negligible and assured that there are no risks involved.