Monday, January 26 2015 12:12

Hundreds of people have gathered near the building of the Armenian Government. They demand suspending the Law "On Turnover Tax".  

ArmInfo's correspondent reports from the scene that nearly 500 people engaged in the field of trade are taking part in the action of protest. They are protesting against the Law "On Turnover Tax" that will come into effect on 1 Feb 2015. The demonstrators say that the Government has disappointed their expectations and has failed to take any serious steps to ease the tax burden. Moreover, the demonstrators think that in September 2014 the demand for commodities sharply declined and the major part of the imported products has remained unsold. They say that at the moment the supply is 5-10 times as high as the demand and that it is simply senseless to speak of a document flow of the deals. The demonstrators claim that by applying the provisions of the specified law, the Government is creating conditions for a new wave of migration.           

To recall, the Law was initially to come into effect on 1 October 2014, however, numerous actions of protest made the Government put off the application of the Law till 1 February 2015. The turnover tax for economic entities engaged in the field of trade will be reduced from 3.5% to 1%. However, the Law has a provision on compulsory document flow of the deals, which has prompted the protests. The medium and small importers, mostly, importers of clothes, think that they have no enough resources to hire accountants to compulsorily submit a document on inventory as of 1 Feb 2015 to the tax bodies.      

To note, the following types of responsibility will be applied to SMEs: a warning for violation of the law; a 20,000 AMD fine for repeated violation; and a 5% turnover tax for a third case of violation. The economic entities violating the Law on Turnover Tax for the 4th time will occur in the field of VAT. Starting from 1 Jan 2016, an SME having no document flow will have to pay the tax at a higher rate - 5%. VAT tax will be charged if an economic entity fails to submit document flow for a second time.