The opposition Yelk alliance said on Friday that it will continue to campaign for the scrapping of new government-drafted legislation that raised income taxes for Armenians earning well above the average wage in the country.
A Yelk parliamentarian, Gevorg Gorgisian, said it will table amendments that would restore income tax rates that were in force until January 1. “We are now working on a draft bill and it will again be circulated [in the parliament,]” Gorgisian told RFE/RL’s Armenian service (Azatutyun.am).
He said the bill would also reverse increases in taxes on fuel, tobacco and alcohol which also took effect on January 1. In addition, Yelk will hold more demonstrations in Yerevan in support of its demands, added Gorgisian.
The controversial changes made to Armenia’s Tax Code raised from 26 percent to 28 percent the tax rate for monthly incomes ranging from 150,000 to 2 million drams ($310-$4,150). The rate for those Armenians who earn more was set at 36 percent. The amended code at the same time cut the tax rate from 24.4 percent to 23 percent for workers making less than 150,000 drams a month.
Government officials insist that the more progressive tax will put a heavier financial burden only on high-income individuals. They argue that 90 percent of employed Armenians, who make between 150,000 and 280,000 drams, will not have any additional sums deducted from their wages because of a complex method of income calculation. And those who earn from 280,000 to 330,000 drams will pay an extra amount of only up to 820 drams ($1.7) a month, the say.
The average monthly wage in Armenia stood at almost 188,000 drams ($390) as of November 2017, official statistics show.
Khosrov Harutiunian, the chairman of the Armenian parliament committee on economic issues, dismissed opposition claims that the higher taxes will hit the middle class hard. He too argued that 90 percent of working-age people will not be negatively affected by them.
Accordingly, Harutiunian, who represents the ruling Republican Party of Armenia (HHK), rejected the Yelk demands. He said the parliament majority might only agree to an even more progressive tax that would mean lower rates for wages not exceeding 150,000 drams and higher rates for much higher incomes.
Yelk leaders pressed their demands for tax cuts when they rallied hundreds of supporters in Yerevan last week in protest against recent increases in the prices of fuel and some foodstuffs. The opposition bloc blamed the fuel price hikes on the new Tax Code.
The authorities claim to be trying to ease the impact of the increased prices. Harutiunian and another senior HHK lawmaker plan to introduce a bill lowering a major tax collected from public transport companies. It is aimed at discouraging them from raising bus and minibus fares.
In a related development, the Agriculture Ministry announced on Thursday that the government will subsidize the price of diesel fuel widely used by farmers across the country.
Gorgisian dismissed these measures as “cosmetic.” Yelk, which holds 9 seats in the 105-member parliament, will hold its next anti-government rally on February 5.