The decision will become a law after its adoption by the parliament where Prime Minister Nikol Pashinian’s political party enjoys a comfortable majority.
Finance Minister Tigran Khachatrian said at a weekly cabinet session today that the system will become operational in 2023 and will gradually involve all resident citizens of Armenia within the next three years. The reform, he said, will consist of three phases at which different groups of citizens will become subject to the requirement of declaring their incomes.
Under the draft proposed by the Ministry of Finance, tax authorities will pre-fill declarations, including information about incomes and paid taxes, which will be accessible for declarants electronically.
Entering the electronic reporting system with identified data, declarants will be able to verify the data, make changes and additions, if necessary, and approve the final version of the declaration by April 20 of each year, the minister said.
Under the draft, in parallel with the introduction of the system, stimulating measures will be introduced through the system of social credits. Khachatrian said that citizens submitting declarations will have the opportunity to get some of their income taxes refunded for their or their family members’ documented healthcare, education and housing expenses.
Individual directions of the types of social expenses, the scope of family members and the maximum amounts of compensation will be defined by the government’s decision within six months following the adoption of the relevant law by parliament, the minister said.
Khachatrian said that the government also envisages penalties for citizens who fail to confirm declarations ranging between 20,000 and 300,000 drams ($50-$750), but added that the final sizes of penalties may be reviewed in parliament.
The government submitted the draft to the National Assembly for consideration and adoption in an urgent manner.
At present, declarations of income in Armenia are filed only by officials and members of parliament.