Armenia will switch to a flat income tax rate starting from January 1, 2020. The adoption of the new tax reform package by Armenia’s parliament has been voted for by 73 MPs. Thirty-two lawmakers, among which were those of the opposition Prosperous Armenia party, voted against the government-backed amendments.
The new tax code sets income tax at 23% for all citizens regardless of the size of their income. The tax rate will be progressively reduced to 20% until 2023.
The Armenian government expects the income tax revenues to drop by 30 billion drams (approx. $63M) and in the payroll tax by 11 billion drams (approx. $23M). According to the government, the losses resulting from the amendments will be compensated by the rise in excise taxes.
The new tax package will also reduce the tax on dividends for non-citizens from 10% to 5%.
Meanwhile, taxes on the gambling industry will increase by 20 per cent starting from 2020.