Representatives of small and medium businesses came to the National Assembly of Armenia on April 30 and at a meeting of the parliamentary standing committee on economic issues demanded to cancel the unpopular tax changes previously proposed by the government.
In particular, they oppose the increase in the turnover tax for SMEs from 5% to 10% and the conduct of an inventory. All this, according to them, requires accounting services that are unaffordable for small businesses.
The turnover tax, which replaced VAT and income tax, is paid in Armenia by business entities whose annual turnover does not exceed 115 million drams. In June 2024, amendments to the Tax Code were adopted, which entered into force at the beginning of 2025. They imply an almost double increase in the turnover tax rate, with the possibility of reducing the tax payable through documented expenses. In particular, for entrepreneurs involved in the trade sector, the initiative set a rate of 10% of income (instead of the previous 5%) with the possibility of deducting 9.5% of expenses, but not less than 1% of turnover (against the previous 4% of documented expenses, but not less than 1.5% of turnover).
Thus, the effective tax will increase from 2.3% to 4.1%, thereby providing additional tax revenues in the amount of 4.9 billion drams.