Armenian PM: Dentistry in Armenia paid no taxes at all, while getting a quite tangible profit

• Wednesday, February 6, 18:42

 The Government of Armenia has received and is still receiving numerous complaints saying that the dentistry sphere is "in the shade", Armenian Prime Minister Tigran Sargsyan said in Parliament when responding to the concern of Lyudmila Sargsyan, MP from the opposition Armenian National Congress faction.

He stressed that in general this sphere paid no taxes at all while receiving quite a tangible profit. In this connection, "the Government took minimal measures of administrative influence in order to gain some results". The matter concerns fixed payments, on which the MPs themselves insist, especially in the context of the fight against "the shadow economy". Moreover, this sphere has a competition, which demonstrates a lack of monopolies. "Walk along the streets of Yerevan and you will see dozens of signs inviting you to visit the dentists", he said. It is also important that the republic holds one of the leading positions in the world by its dentistry. Foreign citizens come to Armenia to get dental services at a lower price and comparatively high quality. However, it is one thing when the matter concerns business organizers, and quite another thing when the matter concerns the dentists themselves. Most of those who complain are business organizers who do not want to pay any taxes. The calculations made by the State Revenue Committee and Finance Ministry show that the amount of the fixed payments for dentists is very low as compared with other spheres. The premier said that he instructed these structures to submit these calculations for the public's approval.

To remind, on Feb 4 the dentists of Armenia held a protest action in front of the building of Armenian Parliament, demanding that the amendments to the Law "On License Payments" should be revised. On Jan 31 several dozens of dentists went on a protest action in front of the Government building. The amendments to the above law that came into effect on Jan 1 2013 oblige dental clinics to pay 80,000 drams license payments per dental seat quarterly instead of the previous 12,000 drams (nearly $30). Earlier Speaker of Armenian Parliament Hovik Abrahamyan said that a new bill was being prepared.

To note, at the January 26 extraordinary meeting of Armenian dentists, over 1,300 delegates signed an appeal addressed to the president, prime minister and parliament speaker suggesting reduction of the license payment to 30,000 drams "for the first zone (Yerevan) with application of relevant coefficient for the other zones (regions)" impose a tax on the X-ray diagnostics, ball-bearing laboratories operating in the clinics. As regards children's dental seats, they offer a 0.5 coefficient for license payment.  The amendments to the Law "On Licensing" applied also to realtors. Thus, the real estate agencies of Yerevan are to pay 60 thsd AMD monthly for every employee, and the agencies in the region - 10-50 thsd AMD.

Experts say that there are up to 12,000 dentists and 200 real estate agencies in Armenia. They believe that the amendments to the tax legislation will lead to price hikes in the spheres of dental and real estate services and possible illegal business. Earlier, IMF announced 35% shadow economy in Armenia, while Bloomberg and Business Week believe this indicator in Armenia has reached 51.7%.  By data of the National Statistical Service of Armenia, tax revenues of the state budget totaled 725.5 bln drams with a 14.9% annual growth.