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Traders Keep Up Pressure On Armenian Government


Armenia - Market traders demonstrate outside the Prime Minister's Office in Yerevan, 2Oct2014.

Armenia - Market traders demonstrate outside the Prime Minister's Office in Yerevan, 2Oct2014.

Prime Minister Hovik Abrahamian again met with representatives of market traders in Yerevan on Thursday as hundreds of them continued to demonstrate against recent changes in tax legislation which they say could ruin their businesses.

Other senior officials, meanwhile, defended the new taxation regulations and ruled out any amendments to an Armenian law on a single turnover tax levied from small businesses with annual sales of up to 58 million drams ($140,000).

Earlier this year the Armenian 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 their transactions with larger suppliers or face for hefty fines.

The official purpose of the measure is to combat tax evasion among large-scale importers of goods. Scores of small business owners, most of them selling goods in markets, say that they cannot comply with it because wholesale traders routinely refuse to issue receipts to them.

Three of their representatives repeated this argument at a meeting with Abrahamian held during yet another rally staged outside his office in downtown Yerevan. They presented him with written proposals meant to address their concerns.

“The prime minister will examine our proposals in the next three or four days,” one of the participants told the angry crowd. “He was very interested and surprised to learn many things.” He said the prime minister also promised to instruct tax authorities not to audit small firms covered by the turnover tax until December.

Many demonstrators were unconvinced by these assurances, calling for continued protests against the government. “[Abrahamian] told yet another lie,” said one man. “He has lied many times before.”

Armenia’s four main opposition parties proposed earlier this week that the government not enforce the new rules at least until January 2016. However, the pro-government majority in the National Assembly rejected the idea.

Several opposition lawmakers met with Finance Minister Gagik Khachatrian and parliament majority leaders on Thursday to again discuss the issue. “We are in deadlock right now,” Aram Manukian, a deputy from the opposition Armenian National Congress, told RFE/RL’s Armenian service (Azatutyun.am) after the meeting. “The situation is very clear now. The government is not making any concessions.”

In Manukian’s words, Khachatrian claimed that failure to enforce the law on turnover tax this year would result in a state revenue shortfall of 10 billion drams ($24.5 million). Khachatrian also argued that both he and Abrahamian have ordered tax officials to avoid “unfounded” inspections of small firms.

Vahram Baghdasarian, the parliamentary leader of the ruling Republican Party of Armenia (HHK), said those orders are enough to dispel the traders’ concerns.

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