Armenia may exempt all micro-enterprises from taxation

The Armenian National Assembly is considering exempting all micro-enterprises from taxation.

What is a micro-enterprise?

All commercial organizations with an annual turnover of no more than 24 million drams (about 50 thousand USD) will be considered micro-business in Armenia. Micro-enterprises will be exempt from all types of taxation, except employee taxes, which will be 5,000 AMD, or about $10 per individual.

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Reasons for making such a decision

The Armenian government says this will stimulate the economy and the emergence of new jobs.

Moreover, the bill’s authors say that the budget will not suffer greatly. Many citizens will thus be able to open small businesses.

Armenian Prime Minister Nikol Pashinyan also believes that this will reduce the level of poverty in the country.

“Of course, there will be certain restrictions depending on the sphere. With the help of this policy, we will try to stimulate economic activity, especially in the rural areas.”

Expert opinions

Observers agree with the authorities’ decision to exempt micro-enterprises from taxes. Economist Tatul Manaseryan considers this a necessary measure, one from which the state will benefit:

“The scanty amount of taxes that comes from micro-enterprises today is completely incomparable with the effect that the GDP can get with the full exemption from taxes in this sector.”

At the same time, Manaseryan says that the state should maintain tight control so that small businesses are not artificially put into this category.

“When the ‘micro’ grows into a small business, I suppose then it is necessary to establish tax benefits, and with the increase in volumes and transition to the category of medium-sized businesses, the enterprise should already enter the general tax field.”