The abolition of social payments and their joining the income tax will start from January 1st, 2013, but news is spread that the system is not ready for changes yet.
The deputy president of SIC Armen Alaverdyan denied this news in the interview with “1in.am News and Analysis” and assured that the changes will enter into power after January 1st, 2013.
He mentioned that the ministry of Finance has presented the law package “About Income tax” to NA and it was approved last year. The preparations are in process and it will be executed on time. “Some changes need to be done for the program work to be realized. The Ministry of Finance has a special project for it which was presented to NA and it needs to be approved for program security. It will be discussed in NA fall session.”
To the question whether it is possible that the tax burden will press the employee, and the employer will not be able to compensate, A. Alaverdyan answered: “I think that such possibilities are turned to minimum.
We remind that the social payments and income taxes of the employer and employee will join and become a united tax. The scheme will work by raising the nominal wage and then taxing 24.4% from this nominal wage of 120 thousand AMD, in case o more wage 26%.
By government’s decision the employers should review the employees’ salaries so that that the salaries won’t change by the execution of the new system.
Taxes fall on employers and there is an expectation that they won’t be happy.
