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Parliament Majority Blocks Changes In Controversial Tax Law


Armenia - Pro-government deputies boycott an extraordinary parliament debate initiated by the opposition minority, Yerevan, 30Sep2014.

Armenia - Pro-government deputies boycott an extraordinary parliament debate initiated by the opposition minority, Yerevan, 30Sep2014.

The pro-government majority in Armenia’s parliament rejected on Tuesday an opposition bill that would delay the enforcement of controversial new taxation rules which have sparked angry street protests by small traders.

The National Assembly failed to make a quorum at an extraordinary session forced by the opposition but boycotted by its deputies representing the ruling Republican Party of Armenia (HHK). The boycott meant that the assembly could not even debate amendments to an Armenian tax law that were put forward by the four main opposition parties represented in the parliament.

The law in question mandates a single turnover tax for small firms and individual entrepreneurs with annual revenues not exceeding 58 million drams ($140,000). Earlier this year the government pushed through the parliament amendments that cut the turnover tax rate from 3.5 percent to 1 percent.

At the same time the amendments, effective from October 1, obligate those entities to provide tax authorities with documentary evidence of all of their transactions with larger suppliers. Failure to do so would make them liable for hefty fines. The official purpose of the measure is to combat tax evasion among large-scale importers of goods.

Armenia - Market traders protest outside the parliament building in Yerevan, 29Sep2014.

Armenia - Market traders protest outside the parliament building in Yerevan, 29Sep2014.

Hundreds of small business owners, most of them selling goods in markets, have staged a series of street protests against this requirement over the past week. They say that they cannot comply with it because wholesale traders routinely refuse to issue receipts to them.

The traders secured the backing of the parliament’s opposition minority as they demonstrated outside the National Assembly building in Yerevan on Monday and Tuesday. Representatives of the four minority factions told them that they have initiated an extraordinary parliament session to demand that the entry into force of the new tax rules be postponed until January 2016.

“Don’t be too buoyed,” cautioned Aram Manukian of the opposition Armenian National Congress (HAK). “The authorities will counter your joy. They will do everything to ensure that the session doesn’t take place.”

Only 37 members of the 131-seat parliament, virtually all of them opposition deputies, showed up for the planned debate later in the day, meaning that the extraordinary session cannot go ahead. The angry crowd demonstrating outside the chamber did not disperse after that.

“What do they [the authorities] want from us?” one protester told RFE/RL’s Armenian service (Azatutyun.am). “They have created no jobs for us. We are barely managing to get by on our own.”

The protests spread to Armenia’s second largest city of Gyumri on Tuesday. News reports said some 700 local traders gathered there to also demand the repeal of the controversial measure.

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