Postponed Again: Government sets new date for application of
controversial tax sales law

ECONOMY | 01.02.15 | 12:31

Small traders in Armenia will not be required to provide documentary
evidence of their transactions with wholesale suppliers for another
five months, it emerged over the weekend.

On Saturday, the Armenian government decided to postpone the
application of a corresponding provision of the controversial sales
tax law until July 1. The decision followed days of protests staged by
representatives of small and medium-sized companies demanding that the
law that was due to take effect on February 1 be reconsidered.

After the Friday protest, which was the fourth during the week,
Armenian Prime Minister Hovik Abrahamyan met with representatives of
the protesters and promised to provide solutions to the problems they
raised. It is expected that before July 1 the government will work out
and present new mechanisms that will ensure a smooth enforcement of
the law.

The government's latest decision will need to be approved by the
National Assembly that is expected to make appropriate amendments in
the law.

The law in question actually reduces the sales tax for small and
medium-sized companies from 3.5 to just 1 percent, but sets stricter
conditions to traders in terms of documenting their wholesale
purchases from larger companies. The government believes the measure
will both help small businesses and make it much harder for
large-scale Armenian importers of goods to evade taxes.

Most traders, however, believe this will only complicate their work as
they see more risks of being fined by tax authorities.

The application of the law that originally was to come into effect on
November 1 was already once delayed till February 1 as small traders
held a series of demonstrations in front of the government building in