Adoption of new tax code would trigger new street protests, UITE deputy chairman

YEREVAN, June 17. /ARKA/. Armenian government-drafted tax legislation, adopted with a vote of 68 to 21 and 18 abstentions by the National Assembly in the first reading despite strong objections from the opposition and even the ruling Republican Party of Armenia, runs contrary to the government’s IT development strategy,  Deputy Executive Director of the Union of Information Technologies Enterprises (UITE)  Hayk Chobanyan, said to at a public discussion of the new tax legislation today.

"All the achievements of the IT industry of recent years may be nullified. The new Tax Code is directed against Armenia's economic development. An increase in the income tax rate in this sector would increase the tax burden by 20-30% and the sector would not bear it,’ he said.

According to the government, the new Tax Code, which calls for higher taxes on fuel, alcohol and tobacco is designed to improve the tax collection and boost state revenue.

The new Tax Code, if approved in the final reading, slated for autumn, would raise the income tax rates for workers earning 120,000 drams ($250) or more per month from 26 to 28 - 33 percent. Income tax rates for those who earn at least 2 million drams would be downed from 36 percent to 33 percent. Workers who earn less than 120,000 drams a month would have their income tax rates cut from 24.4 percent to 23 percent.

In Chobanyan’s words, the new Tax Code if adopted in the final reading would affect the competitiveness of Armenia's IT industry.

"Currently, 15 thousand people are employed in the IT sphere with a salary of $1,800-$2000. Increasing the tax burden will force young IT engineers to take to streets,"  Chobanyan said.
In 2015 Armenia’s IT industry’s total turnover was estimated to be $550 million, an increase of 17% over the previous year. -0-