The theme of “Aravot” online “Face to Face” talk show is discussed by President of the Association of Employers of Armenia, Gagik Makaryan, and Director of “Antares” Media Holding, Armen Martirosyan.
Aram Abrahamyan – The government announces that the turnover tax reduction from 3.5% to 1% will contribute to the development of small and medium-size businesses. Do you agree with it philosophically?
Gagik Makaryan – Yes. Still one year ago, during the previous government, the experts of the European Bank for Reconstruction and Development evaluated the state of affairs in small business in the field of trade, and still then, it was revealed that a few thousand companies were closed. And the problem comes from the fact that due to reduction of population and growth of poverty, the purchasing power had dropped, and the commercial companies obviously felt it on themselves. Still at that time, preliminary talks took place of what model to suggest that can help promote to correction of the situation. During that period, meeting with representatives of various non-governmental organizations, we developed a model with several “either – or” options, if up to 60 % of turnover is provided or up to 80 percent, and in what case it may have the right to remain 3.5 percent. But, I do not know how it happened: the government is changed, and the law was written very quickly in an option that immediately introduced a “toughly” category, that is a 100 percent documentation, if not, it will be followed by the relevant sanctions: warning, then an administrative fine of 20,000 AMD, then 5 %, and later 20% VAT.
A. A. – Do you also agree that reduction was right?
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Armen Martirosyan – Reduction is the same as you give a flower to the business community or the small businesses, but there is a difference here the time when you give the flower. Do you give it when the business is alive or you’re already putting it on the tombstone, especially when you have killed it? In other words, when we look since 2008 up to now, the government killed the business, and now is putting a flower on the tombstone.
A. A. – In other words, doesn’t it have hope for its recovery and staying alive?
A. M. – If the government possesses the gifts of divine and resuscitation, it is possible.
A. A. – Consequently, doesn’t this step make sense?
A. M. – When the law on simplified tax dropped out in 2008, and a law was introduced, turnover tax, but both the costs and sales were to be shown, we taught our citizens, our small and medium enterprises that collecting a document, documentation is a correct process, and they do it. But it is as hard to teach them as easy to de-teach them, degrading, and in 2013, the turnover tax of 3.5% was introduced. If we compare it with the elections, we will see the following: when do we start complaining of the law, when it comes to penalties and fines, it is applied when it is the time to report. The day was April 20, 2013, when the elections were already over, in other words, the public got the surprise, what it means that it grew from 1 percent to 3.5 percent, in other words, they made the business burden 3.5 times harder, and now they want to make a move back as they saw that this 3.5 percent did not work out.
Prepared by ARAM ABRAHAMYAN
“Face to Face” talk show series are released by the Open Society Foundations- Armenia. The views and analyzes found in this broadcast express the opinions of the participants, and are not approved by the Open Society Foundations-Armenia, or its Board. This broadcast is made available thanks to comprehensive financial support by the Open Society Foundations-Armenia, under the mass media support program, grant No 18624.
