From whom income tax to be levied
There is no wage reduction threat under the RA Law on Income Tax that will take effect on 1 January 2013, Finance Minister Vatche Gabrielyan and Minister of Labor and Social Affairs Artyom Asatryan said at a meeting with reporters today.
According to Finance Minister Vatche Gabrielyan, neither an increase in the tax burden of wage workers nor a reduction of their incomes is expected, quite the opposite, the wages will rise.
They said that the Law on Income Tax has been repeatedly discussed by the Government and the National Assembly: it is a change taking place in the pension system context. Under the law, income tax and compulsory social security payments will henceforth be united.
Minister Gabrielyan stressed that in accordance with the law, if an employer chooses to lower the salary of an employee, he/she will have problems with tax authorities.
"In our opinion, no employer decided to cut salaries, if he pays the proper amount of taxes".
Minister of Labor and Social Affairs Artyom Asatryan added that since the salaries of employees shall not decrease, it means that in 2013 employers have to raise salaries and assume additional tax liabilities. "An employer has to pay as much income as he does in 2012..This presupposes a rise in salaries so that when making income tax payments, the employer will pay the same amount to the employee as he did before the new law took effect. Under the law, the employer may not show less amounts of salaries in documents because this is regulated by a government decision regarding employer-wage worker relations.
Mr. Asatryan gave an example: in case of a salary of 100,000 drams, the compulsory social security payment was previously 19,000 drams and 9,400 drams was deducted from the salary, while now the liabilities of an employer have only increased by an additional payment of 750 drams.
The minister noted that in particular, this sum is envisaged in case of submitting electronic tax statements.
The two ministers said that the law will help reduce the shadow economy.
