Armenian Government Plans Tax Hikes on Gambling Business Because of Increased Profits

Armenia’s government has invited an extraordinary National Assembly sitting to discuss three new loan agreements which would increase the country’s foreign debt by nearly 180 million drams (about $ 375 thousand), as well as to debate a new bill, which envisages a 5-time increase in tax compliance burden for some business entities.

Presenting the draft amendments to the law “On State Duty,” deputy minister of finance Karen Tamazyan announced that the AMD 100 million fee for gambling companies and online gaming organizers would now amount to AMD 500 million, claiming that their profits “have been increasing at rapid rates,” while taxes have remained unchanged since 2003 and 2006.

Non-partisan lawmaker Tevan Poghosyan asked the deputy minister whether the new tax levies would go straight to the state budget, or be directed towards the development of the field policy, for exaple, to prevent kids from gambling; “Or did you just see yet another chance to scrape up money from the increased profits? What’s the real philosophy [behind the amendments]?”

Tamazyan answered that, like all taxes, these funds would also be transferred to the budget; “In 2014, gambling companies’ income amounted to AMD 33 billion, in 2015 – AMD 38 billion. There is a tendency of growth. Online gaming brought a profit of AMD 44 billion in 2014, AMD 77 billion in 2015, and AMD 108 billion in the 11 months of 2016.”

Prosperous Armenia lawmaker Mikayel Melkumyan observed that a great income flow is not always a sign of profitability, to which the deputy minister replied that the profitability has also increased by 5-20 percent. “The state budget will now get 4 billion drams instead of the previous 800 million,” he added.