On January 24, a new draft law "On Amendments and
Additions to the Tax Code of the Republic of Armenia" was circulated on
the website for the publication of draft legal acts - e-draft.am.
Article 4 of the draft law envisages rewriting part 3 of
Article 254 of the Tax Code, adding legal service providers to the list of entities
that do not pay sales tax.
If the draft is adopted, from October 1, 2024,
businessmen providing legal services will pay 10% tax instead of 5%, and from
January 1, 2025, about 20% VAT and 18% profit tax, which will be calculated on
taxable profit, gross income attributed to the tax year and from the difference
in deductions.
In order to get the opinion of the Human Rights Defender
regarding the draft law, the President of the Chamber of Advocates addressed
the Defender. The
Human Rights Defender Anahit Manasyan presented a position regarding the
above-mentioned draft law.
Accordingly:
The Defender believes that although the state has a wide
discretion to determine the tax policy, in terms of the discussed draft, the
necessary justification for evaluating the legality of the tax policy change
was not presented in accordance with international standards. Moreover, no
evaluation of the possible effects and risks of the new regulation on the human
rights protection system was presented.
The Defender emphasizes the fundamental role assigned to
advocates in a democratic society, as well as the need for advocates to observe
the principle of independence of the advocate's professional activity, the
advocate's ethical principles and the advocate's code of conduct.
The Defender, taking into account the specifics of the
activity of advocacy, emphasizes that any changes related to this sphere should
be considered both in the context of the proper realization of the public
rights and their protection in the context of the positive duty of the state.
The Defender emphasizes the proper organization of public
discussions regarding the goals and justifications of the draft, taking into
account especially the fact that the provisions of the draft have created an
occasion for discussions and concerns.
Acknowledging the willingness of the competent body to
organize public discussions, the Defender emphasizes that the draft regulations
should be properly discussed with all interested actors, including the
community of advocates.
The Human Rights Defender especially emphasizes that it
is necessary to inform the public about the content of the draft law, the
changes proposed by it, as well as the possibility of participating in the
planned discussions regarding the draft, considering their right to participate
in the conduct of public affairs, including by influencing the public debate.
Thus, the Human Rights Defender concludes that although
the state has a wide discretion to determine the tax policy, in terms of the
discussed draft, the necessary justification for assessing the legality of the
change in the tax policy was not presented in accordance with international
standards, and the possible effects and risks of the new regulation on the
human rights protection system were not presented, as well as proper public
awareness activities and necessary discussions with the beneficiaries were not
carried out.
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