Government plans to reduce tax exemptions and increase tax revenue
Government approved a schedule of tax legislation amendments for the period of 2012-14. The schedule provides for the following amendments:
- Reviewing current VAT regime for financial services
- Restricting tax incentive periods to a maximum of five years and requiring cost and benefit analysis for future tax incentives
- Eliminating minimum taxes and improving the advance payments system
- Introducing declining-balance depreciation with pooling of assets
- Considering elimination of tax breaks for the Pan Armenian Bank
- Introducing automatized systems for real property assessment
- Eliminating discretionary tax exemptions by municipal authorities
- Introducing mechanisms to ensure refund of VAT debit balances to taxpayers
- Implementing the accrual principle in VAT taxation
- Disallowing educational expenses deduction
- Taxing capital gains
- Improving the excise and VAT taxation of gasoline and diesel fuel
- Bringing cadastral values of real property in line with market prices to increase the collection of property taxes
- Eliminating VAT exemptions for the sale of tobacco products, books and periodicals, precious and semi-precious stones, jewellery, carpets, and provision of touristic services to foreigners.
