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Official News

Thursday, 13 March 2014

Prime Minister Tigran Sargsyan is convinced that the Bill to provide privileges for the IT sector will ensure new advances. The new draft law should be acceptable to small and medium-size enterprises.

The Government at its meeting approved a draft law “On State support of information technologies,” which regulates the basic principles of State support for the IT sector and the attitudes related to the formation and use of support systems.

As far back as in 2000, this sector was recognized to be one of the priority sectors of the Armenian economy and was a focus of constant attention on the part of the Government. During 2008-2012, there was recorded about 23 percent average annual growth.

In order to promote investment in human capital, improve the competitiveness of the IT industry, various amendments were developed to amend this law, as well as the laws “On Profit Tax” and “On Personal Income Tax.” It was planned to give the field a number of privileges: certified organizations will be granted a 0-percent profit tax benefit, plus a 10-percent income tax benefit that will contribute to the formation of new companies and creation of new jobs.

The Prime Minister instructed to report the issue to the Minister of Economy to introduce the Bill to media outlets so that employees in the IT sector might get acquainted with it, the more that the idea was conceived last December, when a conference was held in Dilijan to discuss the topic of innovations.

At the time we voiced this idea, we promised to prepare in a short span of time a draft law and put it on record for public discussion. I wish to emphasize that the issue was discussed with the President and won the President’s approval as it has a political dimension. The IT sphere in its development has reached such a level that it calls for qualitatively changes in order Armenia becomes a specific country with a comparative advantage on the world map.

In our view, the Bill creates the aforementioned prerequisites along with a set of other tools. In particular, I want to mention the Venture Fund to be set up by private companies in cooperation with the World Bank. The funds can also be used to finance startup businesses. That we are providing exceptional opportunities for this field by exempting it from all taxes, leaving only a fixed 10-percent income tax, exempting from income tax, will be a major stimulus for startups, and I feel there will be more progress in this area. I also agree with that proposal that the draft law is urgent as it is long awaited in the IT sector.”

A group of MPs as a legislative initiative proposed to lower to 1.5% the currently applicable 3.5 % interest rate of turnover tax on income derived from commercial and industrial activity. After discussing the initiative, the Government proposed to refrain from discussing the draft law and to take it up after submitting to the National Assembly a package of legislative changes in the near future. The Government thoroughly substantiated its conclusion.

“Proposals to improve taxation mechanisms for small and medium-size enterprises have been introduced also by the Republican Party of Armenia. Proposals were voiced by opposition political figures in the National Assembly and they need to be engaged in the debate. We have adopted an option to be acceptable not only to the Government, but primarily to small and medium-size enterprises, as well as those parties who have initiatives relating to this sphere.”

The above-mentioned draft laws and the Government’s conclusion will be sent to the National Assembly in the prescribed manner.

July 2021