17.5 percent as commitment
The IFC, which is a member of the World Bank Group, has released a new study:
"A study on the value of taxing adequacy has shown that the burden of taxing falls on the shoulders of small and medium businesses and individual entrepreneurs.
For instance, companies with a circulation of up to 5 million drams (nearly 14,000 USD) spend almost 17.5 percent of their circulation to meet the demands of the taxing legislation, while large companies with a circulation of 58.35 million drams and more (160,000 USD) spend only 0.4 percent of that circulation. The study shows that the procedures of businessmen in the sphere of trade are more time-consuming.
Under the initiative of the IFC's "Program for simplification of reforms and the field of sub-legislation for business in Armenia", 1,000 Armenian companies and individual entrepreneurs participated in a survey on the 2009 fiscal year.
The taxing adequacy value doesn't refer to the actual taxes paid, but the administrative expense such as the value of the time that accountants spend on counting taxes, preparing tax reports, visiting and inspecting territorial taxing and local self-government bodies, as well as the value of obtaining accounting programs.
The IFC's "Program for simplification of reforms and the field of sub-legislation for business in Armenia" is implemented through collaboration between the Ministry of Finance of Austria, the Ministry of Development and Cooperation of the Netherlands, the Ministry of Finance of Luxemburg and the Consortium for Promotion of Trade of Catalonia.
