Over two thousand representatives of the small and medium-sized enterprises (SME) gathered outside Government building earlier this morning demanding a meeting with Prime Minister Hovik Abrahamyan. The protesters demand suspension of the Law On Turnover Tax. After the prime minister's assistant told the protesters that the prime minister was busy and cannot receive them, the people headed towards the president's residence.
According to ArmInfo's correspondent on the spot, the people warn to go on a nation-wide strike on February 1, unless the law is suspended. They also demand resignation of Finance Minister Gagik Khachatryan.
A similar action of protest is underway in the town of Kapan, where people have gathered outside the regional administration with the same demand.
To remind, the law looked to reduce the turnover tax for economic entities engaged in the field of trade will from 3.5% to 1% starting 1 October 2014. The decision sparked public outrage and the Government was reluctant to postpone the law till February 1 2015.
The point is that 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.