The topic of the day was the taxation of those who work abroad. It spread like wildfire in the morning among different websites, and was discussed in social media, becoming a topic of sharp debates. By the end of the day the subject was considered closed. At least temporarily.
The topic of the day was the article published on Friday, November 16. In an interview with Radiolur, Acting Chairman of the SRC, David Ananyan, said that there is an idea that Armenian citizens aged 18-65 should make a yearly compulsory income declaration. However, the article became a major topic for social media discussions on November 19.
“The tax will be charged annually. Each person must know that if they received money from abroad, it is income, from which they should pay taxes. Now the people can criticize us for saying, for years our neighbor, relative or spouse has earned money abroad, has sent it and it hasn’t been taxed. Yes, that sum, which was earned and sent should be declared as income, and dues must be paid to the state. If a person who has received this income and has already been taxed abroad, then they must submit the references, we must take into account that tax, deduct the difference, and then tax according to our law,” said Ananyan.
The websites referring to the source, spread the news this morning. Websites that are specialized in economic topics either did not respond or reacted later on, when the subject was clarified from official sources.
The smoke passed from websites to Facebook and turned into a fire. Users wrote that it was unrealistic to make people pay taxes twice and especially to tax that income, for which the Republic of Armenia had nothing to do with.
The topic may have been debated for a few days and developed further if Ananyan didn’t rush to explain his own words in a briefing.
During a press conference with journalists, Ananyan reiterated that it was just an idea and it was not necessary to conduct a serious public discussion about the issue. Moreover, he was convinced that his words were distorted.
Discussions on taxing the money earned abroad are not new. Ananyan says that for 20 years the laws allow for an opportunity to tax this income, but it has not been applied in practice. Furthermore, its not the outsiders who will declare their income, rather it will be done with automated systems.
Each year, the tax authority is going to make a declaration with individuals to find out whether they receive that income or not. An individual can also give a negative answer. Here, ID cards will be necessary, which will help to make people’s income more transparent. That is to say, when making purchases, it will be clear as to how much money the citizen has and this person will receive a return of 1-3% for their sincerity.
This proposed idea, which may or may not be implemented or changed, is a sensitive topic of discussion and is dangerous in a situation when the new government is heading towards elections and expecting people to vote for economic reforms.
David Ananyan is not a newcomer to the government and knows the price of confusion in such a situation, when transfers is one of the driving tracks of the country’s economy. The target is mostly the middle and lower middle class.
He probably, in following the behavior of his former colleagues, wants to check the mood of the people. There is a need to find out and verify the reaction of the people when it comes to reform, and in this case, painful tax changes.
Prior to elections, as a rule, the economic programs of the political forces are very important for the results of the election. It is clear that the programs can be implemented when there is a mechanism for increasing tax revenues.
Once everything has become clear, not over the course of days but hours, another official, Acting Labor and Social Affairs Minister Mane Tandilyan, posted on Facebook, essentially closing the subject. The declaration system can become an effective tool in Armenia, but at the moment it is at least inadmissible to make such a proposal.
Acting First Deputy Prime Minister Ararat Mirzoyan followed the topic, “I learned that the public is thoroughly discussing the subject of taxing remittances. I want to emphasize that without wide agreement, there will be no increase in tax burden, I rule it out.”
Ananyan personally confessed that he had taken the burden himself. Circulating the subject across the media was also a burden.
The views expressed in the column are those of the author's and do not necessarily reflect the views of Media.am.