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The subject of the regulation is the abolition of the privilege of deducting from the profit tax in the amount of the salaries paid for new jobs created within the framework of the investment programmes approved by the Government and their equalized amounts. During the 10 years of the definition of such a privilege, it was practically not widely used among businessmen.

The RA Deputy Minister of Finance Arman Poghosyan presented the proposed amendments to the Tax Code for debate at the NA sitting on January 15. Arman Poghosyan noted that according to the transitional provisions of the draft law, those organizations that started using the privilege and did not complete the five-year period, will continue to use the privilege until the end of the privileged period defined for them.

The Deputy Minister mentioned that during the debate in the NA Standing Committee on Economic Affairs, concern was raised that, perhaps, the reason for not using the privilege is the lack of awareness. Due to this, the debate of the initiative was postponed for a period of two months in order to increase the level of awareness, but even after that, no proposal was received from the business circle or the Committee.

In his co-report, the member of the NA Standing Committee on Economic Affairs Narek Ghahramanyan presented the endorsement of the Committee.

The Deputy Chair of the NA Standing Committee on Economic Affairs Babken Tunyan opined that this sitting is also an opportunity for awareness, and if in the near future there will be proposals from businessmen, the reasons for not using the privilege will be mentioned, then it will be possible to review the initiative and go in a different direction before the second reading. The Deputy Chair of the Committee proposed to vote for it at this stage. He underlined that at the moment there are quite a wide range of tax privileges, including for businesses, and they not only compensate, but they provide greater opportunities to businessmen.

Presenting the viewpoint of Armenia Faction, Artsvik Minasyan highlighted the initiative in the context of encouraging investments in Armenia’s economy. According to him, we are losing another opportunity in the competition to attract investments. “Since the World Bank and the International Monetary Fund agreed that the system of privileges should work, it was necessary to develop this, not to remove it,” the Secretary of the Faction said. He opined that it is necessary not to eliminate the privilege, but to make it more effective. The deputy informed that they are against the initiative in this form.

In his final speech, Arman Poghosyan, not agreeing with Artsvik Minasyan’s observation, assured that the Government had already proposed many programmes for businessmen.