Traders Protest in Front of the Armenian Government: Turnover Tax Doubled
Starting January 1, 2025, most micro-enterprises, as well as a range of small and medium-sized businesses in Armenia, will operate under new tax conditions, which, according to traders, have increased their tax burden and placed them in difficult circumstances.
Changes have been made to the Tax Code. For instance, the turnover tax rate has doubled, and the difference in tax burden compared to VAT and profit tax has been reduced. As a result of these changes, the tax rate for trade entities is set at 10%, for production at 7%, and for public catering at 12%.
The turnover tax threshold was previously set at an annual income of up to 120 million AMD, and for micro-businesses, up to 24 million AMD. In November of last year, Minister of Finance Vahe Hovhannisyan stated that these changes apply to legal, accounting, and management consultancy activities, construction and civil engineering, specialized construction activities, real estate functions (on a contractual or rental basis), technical testing and analysis, market research, professional, scientific, and other activities, as well as healthcare.
The Armenian government aims to bring all sectors under a unified VAT system. This policy’s objective is to strengthen the principles of tax equality and fairness.
On January 13, gold market traders also organized a protest. They complained that the turnover tax they were required to pay had risen from 5% to 10% starting January 1.
Although the tax rate can decrease from 1.5% to 1% with proper documentation, traders argue that the specificities of their sector make it impossible to operate with documented transactions.