Strong Armenia party says tax plan would protect 70,000 entrepreneurs from penalties

A proposed tax reform by Armenia’s Strong Armenia party would reduce pressure on small businesses and remove the risk of tax-related penalties for about 70,000 entrepreneurs, party council member Narek Karapetyan said in an interview with CivilNet Business on Wednesday.

Karapetyan said the party’s economic program aims to create more favorable conditions for small enterprises, arguing that the current tax framework discourages business development.

“Can taxes be doubled? If they can, then taxes can also be reduced and even brought to zero,” he said while outlining the party’s program.

According to Karapetyan, roughly 3,000 small businesses close each year, affecting about 10,000 workers.

He compared the situation facing new entrepreneurs to a young athlete being forced into an unfair competition.

“Imagine a seven-year-old starting boxing and being told on the first day that he must fight a nine-year-old. He will never return because he hasn’t yet developed the necessary skills,” Karapetyan said. “Instead, you give him the chance to train first. The same logic should apply to small businesses.”

Karapetyan said the party’s proposal would allow small enterprises time to grow before facing heavier tax burdens.

“When someone runs a small business and manages to support their family and the families of several relatives, the state taxes them at around 10%, which in many cases amounts to more than half of their profit,” he said.

Karapetyan also criticized disproportionate tax penalties.

“A person may earn 1.5 million drams in monthly profit, yet receive a 10 million dram fine,” he said.

Under the proposed reforms, he said around 70,000 small business operators would no longer face the risk of fearing the tax authorities, which he argued would help entrepreneurs expand and reduce the number of business closures.