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Time in Yerevan: 11:07,   29 March 2024

‘There is a need to boost desolate field of small business’: Economist attaches importance to government’s tax solutions

‘There is a need to boost desolate field of small business’: Economist attaches importance to 
government’s tax solutions

YEREVAN, NOVEMBER 13, ARMENPRESS. Giving tax privileges to small business is vital for Armenia’s economy, economist Atom Margaryan – head of the Innovation and Institutional Research Center at the Armenian State University of Economics, told ARMENPRESSS, commenting on the changes in the Tax Code initiated by the government according to which companies with up to 24 million AMD annual turnover will be exempted from taxes.

“The economic system has always been under the pressure of large business, polarization has constantly taken place, the small business field has been desolated. At this stage this field faces a problem of development. But the problem is not only economic, but also social and political. That initiative aims at developing small and medium business and forming a middle case based on that as a prevailing majority”, the economist said.

He states that granting tax privilege to the small business should have been done long ago. Thanks to this change, some of the people, who are initiators, have a talent of entrepreneurship, will start working if the conditions for running a business are favorable, the taxes are mild, the financial, especially the loan resources are affordable, the market is competitive and there are no administrative and criminal barriers for entering the market.

“In such circumstances people start the creation of jobs. Such initiative can be beneficial for the businesses which are formed based on high technologies, for instance, there is a new invention, a new model has been developed, there is an innovation which can be installed. These proposed tax solutions for the small business can be very favorable and beneficial”, Atom Margaryan said.

According to him, the advantage of this initiative in social terms is that people create jobs on their own, become tax-payers and later can multiply the state budget revenues.

As for the possible risks of the proposed tax privileges, Atom Margaryan said they exist and existed before linked with the trade field.

“We have witnessed previously how the owner of a big business has divided his business into parts. There were such examples in case of some major supermarkets. Therefore, the trade sector is really risky from this perspective. The same can also be applied to the game business, entertainment industry. Therefore, I think while giving this tax privilege a differentiated approach is needed. The advantage must be given to the production field, otherwise, in case of an equal approach, there will be a major problem of control”, the economist said.

Interview by Anna Gziryan

Edited and translated by Aneta Harutyunyan

 








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