High taxes make Armenian IT sector go offshore

20% profit tax makes the IT companies operating on foreign capital in Armenia not to show their income in Armenia, Director of the Enterprise Incubator Foundation Bagrat Yengibaryan said this today.

According to him, high taxes make the foreign companies operating in Armenia transfer salaries here and show their income only in the countries of their origin when the taxing is milder or in offshore zones.

"As a result, the real turnover of the Armenian IT sector is not fully reflected whereas it would be right to create such a tax field where the companies would be interested in showing their income in Armenia", said Bagrat Yengibaryan.

Director of Union of IT Enterprises (UITE) Karen Vardanyan also pointed out the IT sector taxing and a number of issues.

According to him, numerous provisions in the new tax legislation package, which came into force in 2013, particularly larger tax load on high salaries which the sector stands by from other economic branches, don't contribute to the development of the sector.

Issues related to the tax sphere and other spheres will be touched on by the UITE based on the results of the "Monitoring of IT Development Concept" started from 2013 which is aimed at revealing the efficiency of the works scheduled for and implemented within 2008-2018.

"The monitoring will help find out all the issues of the sphere which hinder reaching the target indices of the Armenian IT development concept", said Bagrat Yengibaryan.

Karen Vardanyan noted that the concept envisages complex measures for providing 20 000 workplaces in 2018 ( currently - 10 000) in educational and technology business spheres. "We are planning to establish a body equal to Armenian National Engineering Lab for the IT specialists and open groups of robotics in all the Armenian schools to settle the issue of the staff", said Karen Vardanyan noting that such groups already operate in 7 schools and their number will reach up to 50 till late 2013.

"Monitoring of the Development of IT Concept" program will last 7 months and it's implemented with the financial assistance of the Counterpart International Armenia and USAID.