February 2, the sitting of the NA Standing Committee on Financial-Budgetary and Economic Management chaired by Arthur Harutyunyan took place.
The main speaker of the sitting was the Chairman of the State Revenue Committee Davit Poghosyan, submitted to the Committee for discussion the first issue of the agenda, that is, «On Making Additions and Amendments to the Law "On Profit Tax "», «On Making Amendments and Addenda to the Law “On Income Tax"» and «On Making Addenda to the Law "On Making Addenda and Amendments to the NKR Law “On Income Tax "», «On Making Amendments and Addenda to the Law “On Excise Tax"», «On Making Addenda and Amendments to the Law “On Value Added Tax"», "On Making Amendments to the Law “On Presumptive Payments"», the package of draft laws «On Making Amendments to the Law “On Environmental and Nature Use Fees"» (amended version).
According to the Chairman of the State Revenue Committee, the adoption of the package of draft laws is conditioned by the need to resolve the existing problems during the implementation of the laws.
The chairman of the State Revenue Committee gave clarifications to the issues related to the taxation of fixed payments voiced by the deputies, the annual increase of the excise tax.
The Committee unanimously voted in favor of the draft law.
Further, the Chairman of the State Revenue Committee submitted for discussion by the Commission «On the Establishment of Tax Benefits as a Result of Hostilities», «On Amendments and Additions to the Law “On Income Tax"», "On Amendments and Additions to the Law “On Income Tax"», «On Amendments and Additions to the Law “On Value Added Tax”», and «On Amendments and Additions to the NKR Law “On Value Added Tax”», «On Amendments and Additions to the Law “On Trade Tax”», «On Amendments to the Law on Conditional Settlement Payments”». «On Amendments and Additions to the Law “On Patent Fees"», «On Amendments to the Law “On the Use of Cash Registers"», «On Amendments and Amendments to the Law “On Funded Pensions"», the package of draft laws «On the Recognition of the Law “On Deductions (contributions for the construction, repair and maintenance of roads)"» and «On the Establishment of Tax Benefits and Other Obligatory Payments» was canceled.
Chairman of the State Revenue Committee conditioned the need for the adoption of bills, as well as a package of two new bills, with the imperative of a comprehensive settlement of the problems arising from taxpayers and the formation of a more favorable tax environment for business.
The draft proposes to exempt commercial organizations and individual entrepreneurs from unpaid tax and other mandatory tax liabilities, which are actually operating exclusively in communities under the control of Azerbaijan as a result of hostilities. In particular, from the fulfillment of obligations on profit tax, income tax, excise tax, value added tax, fixed payments, trade tax, compulsory social security payments, road contributions, annual state duty and environmental and nature use fees, as well as fines for violating tax legislation, "On the Use of Cash Registers", "On Cash Transactions" from the payment of fines for violating the requirements of the law.
For the residents of the mentioned communities, the commission proposed to establish privileges in terms of property tax and land tax.
It is proposed by the next amendment to the Law “On Profit Tax” to set the profit tax rate for banking, mining, energy and telecommunications sectors at 18% starting from the reporting year 2020 and from January 1, 2021, to reduce the rate for telecommunications and energy by 10%.
Considering that economic entities suffered significant losses as a result of the war, the economy needs investment, the next amendment to the law proposes exempt taxpayers from 10% income tax rate in 2020-2022.
Taking into account that the mentioned taxpayers have already made profit tax, income tax prepayments and minimum payments for 2020, it is proposed to return the sums to the latter in 2021.
Another amendment to the law "On Income Tax" proposes to reduce the income tax rate to 15 percent in 2021, 14 percent in 2022, and 13 percent from January 1, 2023. The next amendment proposes to set the income tax on wages and equivalent income for individuals employed exclusively by taxpayers engaged in the production of agricultural products, which is intended to encourage the involvement of individuals in agricultural work by sharply reducing the income tax burden.
The draft law "On Value Added Tax" proposes to extend the VAT exemption for selling agricultural products produced in the country, mechanized works carried out during the cultivation of agricultural crops, perennial plantations, housing construction, irrigation water supply transactions until January 1, 2026.
By the draft law “Օn Trade Tax” it is proposed revise the sales tax rate, allowing taxpayers to make deductions for documented gains, and pay the sales tax at a rate of one percent, which will encourage taxpayers to make documented gains. from January 1, 2013, reducing by one percent the cost of documented goods purchased for sale, and 2 percent from January 1, 2022.
It is proposed by the draft laws "On Presumptive Payments" and "On Patent Fees" to exempt taxpayers from fixed patent fees for a period of 3 years, except for lotteries, refueling, pre-ordered fixed fees for public catering services in the customer's domestic consumption facilities in accordance with the relevant agreements. This change will stimulate the continuity of small and medium enterprises, providing jobs.
For a number of small business sectors, such as hairdressing services, clothing, shoe repair, car maintenance, etc. իt is proposed by the draft laws "On Patent Fees" and "On the Use of Cash Registers" to extend the deadline for the introduction of cash registers until January 1, 2026.
It is recommended to declare the law “On Allocations (Contributions) for Road Construction, Repair and Maintenance” invalid.
The draft law "On Defining Privileges on Tax and Other Mandatory Payments" proposes:
• to exempt taxpayers with arrears of up to 10 million AMD from arrears, fines and penalties from October 1, 2020
• to exempt taxpayers with debts exceeding AMD 10 million from fines and penalties from October 1, 2020, as well as in case of repayment of debt not exceeding 10 million drams, in case of repayment of debt exceeding 10 million drams, in accordance with the procedure and procedure established by law. It is recommended to sign the schedule, depending on the amount of the obligation, in a 12-month, 24-month, 36-month or 48-month period (up to AMD 3 million (excluding the amount of benefits), 12-month period, from AMD 3 million to 10 million drams (without the privilege amount) with a repayment period of 24 months, from 10 million drams to 30 million drams (without the privilege amount) with a 36-month maturity, in the case of more than 30 million drams (without the privilege amount) with a period maturity 48 months).
• The benefits provided by the bill will also apply to the existing obligations of taxpayers court decisions and bankruptcy procedures.
The Chairman of the State Revenue Committee answered the questions posed in the declaration on income tax, trade tax and other questions of the deputies. The bill was adopted unanimously, it was proposed to submit its package for the second reading.
Keynote speaker, Deputy Minister of Finance Norayr Avanesyan, submitted the draft law “On Amendments to the Law on Remuneration of Civil Servants” to the commission for consideration. The bill proposes that the salary of civil servants for 2021 cannot be less than 70% of the nominal minimum monthly wage established by the law.
The committee discussed and gave a positive conclusion to the draft law.