Increase in service tax rate will lead to higher prices for these services

A number of changes in tax policy expected from 2025 may cause quite serious problems.

Along with the doubling of turnover tax rates from January 1 next year, a number of service providers will no longer be considered microenterprises. At the same time, among them there are such service providers who are closely connected to the daily life of a citizen. For example, hair services, dental services, car services, etc. This change means that the costs of the business entity due to the resulting tax will increase, and this, of course, will affect the prices of the services provided. To give a simple example, the cost of hair services will go up.

The ban on micro-entrepreneurial activities is very problematic for commercial activities in the regions, which, in terms of the commensurate development, will further complicate the problem between Yerevan and the regions.

In addition to these changes, some professional services will no longer be moved from the area of turnover taxation to the area of general taxation (VAT, income tax). This includes legal services, accounting, financial consulting, among others. Note that from the very beginning of the project, this list was much broader.

This change also implies an increase in the price of these services. Increasing the cost of legal services will actually cause problems, since those with higher incomes will have access to these services, but others won’t.