The increasing trend of external risks is impacting investments, while the increasing trend of public debt is also contributing to the risk. Tadevos Avetisyan, a member of the RA NA “Armenia” faction and a member of the RA National Assembly’s Green Body, emphasized that Armenia is burdened with debt and faced with the long-term challenge of developing its economy.

In the past 27 years, the public debt of Armenia has increased by $6.7 billion, with a $5.1 billion increase in the five-year management of the current administration. This represents a 75.4% increase. As a result, the public debt per citizen of Armenia has increased by $1800.

By 2023, interest payments on public debt have risen by approximately 30%, amounting to 253.4 billion drams. This represents 11% of total tax revenues, 10% of total expenditures, and 36% of social protection and welfare expenditures.

In the same year, the inflows and outflows of foreign currency have decreased by $1.1 billion, indicating a 41% decrease compared to the previous year. This has negative implications for housing affordability and increases the risks associated with planned tax revenues.

These circumstances have led to the government implementing tax evasion and a burdensome tax burden on our compatriots working abroad. This includes deducting taxes from their income and further levying taxes on both income and individuals who already pay taxes.

Regarding the double taxation avoidance agreement between Armenia and the Russian Federation, income tax paid in one country can be deducted from the income tax calculated in the other country. However, if the source country’s income tax rate is higher than the resident country’s rate, an additional withholding tax can be applied.

Before these tax reforms, the lowest tax rate for Armenia in relation to Russia was 13%, which included social security contributions defined by law. Additionally, the socialization of social security contributions has increased the obligations of Armenian residents by 21% of income tax, surpassing the 13% income tax rate in Russia.

Therefore, instead of burdening our compatriots, a fair solution needs to be reached through ordinary tax changes to ensure the socialization of income tax. This will help facilitate the lives of taxpayers without placing unnecessary burdens on their shoulders.

Source: News from Armenia – NEWS.am