It is time we shifted to progressive tax
Armenian authorities do not carry out a key proposition of the RA Constitution. The Republic of Armenia is a social country but today's tax policy doesn't contribute to the establishment of a social country.
"The shadow economy enables them to amass a fortune, buy elite flats in Northern Avenue, islands, rest homes and Hammers for their bodyguards, but they never pay property tax," says Movses Aristakesyan, President of the NGO "Center for Economic Rights".
Movses Aristakesyan thinks it is high time we shifted to a progressive tax. "The profit tax is fixed 20 percent for big and small businesses. Logically, the entrepreneur will enlarge his business and show great losses. The more profit the company has, the higher taxes it will pay, provided that the progressive tax is applied. It will become a guarantee for a social partnership. But to achieve this result, we must start from amending the tax on property."
Movses Aristakesyan notes that the amendments to the Law on Value Added Tax (VAT) have loopholes stemming from the interest of big businesses. While the methods applied against small businesses are rather tough.
If a company has a circulation of 58.35 million drams and doesn't step the threshold, it acts beyond the law as it doesn't pay the VAT. p>
To remind, the parliamentary majority voted for the recent legislative amendments with the exception of the Heritage faction. p>
On the other hand, the coalition voted for the fixed payments that did not derive from the interests of big businesses, including those of the Prosperous Armenia Party (BHK), says Aristakesyan.
"Hayastan" trade centre pays a tax 154 million drams and ranks the 489th on the list of great taxpayers. But everyone knows that the centre brings vast incomes to the owners.
Remind that the center is owned by Hayrapetyans who are BHK members.
"Hrazdan" trade center owned by Rafael-Tatev Ltd is the 347th on the list of taxpayers and Malatia fair-the 128th.
"Given the present economic growth when the import increases by 4.5% tax payments continue to lessen. It means the economic growth doesn't boost profits," says Movses Aristakesyan.
