No Cases of Failing to Issue Receipts Will Be Forgiven After New Year's Bells, Says Nikol Pashinyan

During the period from January to November 2019, there was an increase of 106 million 609 thousand 299 receipts issued compared to the same period in 2018. This astronomical number corresponds to approximately 303 billion drams in recorded commercial turnover. This statistic was presented by Armenian Prime Minister Nikol Pashinyan in a live Facebook broadcast.

“I would also like to note that we have quite good statistics regarding the dynamics of the issuance of accounting documents. From January to November 2019, 18 million 425 thousand 72 invoices were issued. These are exceptionally good indicators. But are we satisfied not just with the time period, are we satisfied with these indicators? Do we think that today all the commercial transactions in Armenia are carried out with the issuance of receipts or invoices? The answer to this question is known to be negative. That is, no. There is a huge shadow turnover in our country, despite the impressive growth,” the Prime Minister said.

After the revolution, there were calls for the issuance of receipts, but according to the Prime Minister, there were also rebuttals arguing that people are struggling to make ends meet, and why they should be fined, etc. “From a legal perspective, that interpretation is not appropriate, but considering the general textual context and the socio-economic situation in Armenia, that question had a degree of legitimacy. Therefore, we made amendments this year to the Tax Code, we formed a new segment in the tax system, which we named microbusiness, allowing individuals with an annual turnover of up to 24 million not to incur tax liabilities and to be exempt from taxes. This was done so that the institutions of issuing receipts and earning a living do not contradict each other.”

Previously, when receipts were issued, the entrepreneur also assumed tax obligations based on the amount printed. In other words, according to Nikol Pashinyan, the fewer receipts printed, the more their so-called livelihood increased. With the new tax approach already in place, small entrepreneurs with up to 24 million in turnover are exempt from taxes and will no longer have issues regarding whether or not to print receipts.

“Now we have solved a problem with the 24 million, so that our compatriots earning a living do not have to worry about missing a receipt because if they are genuinely intent on earning a living, they should have no concerns about any limitation on issuing receipts because if it turns out that their turnover is based on earning a living, they will no longer have tax implications from January 1, 2020. In the case of not issuing a receipt, they should be aware that they will bear serious administrative responsibility, and this will not be just for not issuing receipts; this will be for stealing a soldier's bread, a soldier's bullets, a soldier's dignified clothing. We are serious about this issue, and I want us to acknowledge the seriousness of the situation,” he added.

Due to the change in the Tax Code from January 1, 2020, according to the Prime Minister, the legitimacy of not issuing receipts will disappear. Moreover, unlike in the past, in the new situation, it will be possible to confirm that people are earning a living only through the issuance of receipts. “From January 1, that is, after ringing in the New Year, there will be no situation in Armenia where not issuing a receipt will be eligible for forgiveness. I have already said that after the revolution, we have increased state budget revenues by 356 billion drams based on the 2020 draft. We are not thinking that this is the entire potential; we must increase our budget even further and reduce the shadow economy. The failure to issue receipts in these small objects creates significant shadowing even in larger enterprises. They sometimes justify not creating accounting documents based on the argument that small shops and retailers do not want accounting documents, because then they will have to show them. Delivery persons say that if they are told they can only deliver goods based on accounting documents, they won’t get the orders; they will take them from competing companies. The shadow for larger enterprises comes from this process. These are different links in the chain. If everyone issues receipts without exception, that shadow in larger entities will become impossible,” the Prime Minister asserted.

The trader who does not issue receipts steals from a soldier's bread. This year, due to a new budgetary approach, significant changes have been made in the army, some of which we know about, while the other part, according to the Prime Minister, we will learn at the start of the New Year. This was made possible precisely due to the collection of additional income for the budget.