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Tuesday, September 19, 2017

Family businesses in Armenia may get tax exemption under proposed changes

The Armenian parliament began considering changes last week that would exempt "family businesses" with annual turnover of less than $29,000 from taxes and reduce the rate of turnover tax paid by companies with annual sales of up to $140,000 from 3.5 percent to one percent.

While several government officials have said the bill would give a major boost to family-owned businesses, preliminary estimates show tax revenues would drop by nearly $20 million. Armenian Prime Minister Hovik Abrahamyan, however, said earlier this month that the loss in tax revenue would be replaced by higher taxes on large businesses, ARKA reports.

The previous government implemented a turnover tax last January, replacing profit and value-added taxes paid by small businesses engaged in retail or wholesale trade. If passed, the changes would take effect on Oct. 1.