A short remark about "Armenia-ICT-tax incentives YES/NO"

Within financial management, supplemental financial tools hold a pivotal role in navigating expected alterations in budgetary dynamics. However, scrutinizing government budget adjustments and their subsequent impact on tax revenues becomes essential. Simultaneously, Armenia's IT sector has vocalized a noteworthy concern about the nation's declining competitiveness vis-à-vis other nations actively pursuing investments, nurturing emerging businesses, and retaining established ones. This outcry highlights a critical juncture, emphasizing Armenia's imperative to fortify its appeal and resilience. It arises in response to the vigorous efforts of other nations in cultivating enticing environments for technology-driven enterprises. Taking measures towards "reducing the income tax", intended for the classification of differentiations envisaged therein, does not necessarily encompass the provision of additional financial resources required. Regarding governmental budgets and expenditures, expected changes stemming from the regulations outlined by the Republic of Armenia's government in 2022, pertaining to the partial funding of the supervisory bodies in the field of information technology (IT), have not resulted in substantial excesses in public financial management. Foreseen alterations in mandatory tax payments in the 2023 public budgets have been designated at 2203.7 billion Armenian Drams, based on the stipulations in the decrees of the Republic of Armenia, dated March 24, 2022, No. 399-L, and December 1, 2022, No. 1863-L, which have allocated 12.5 billion AMD to support the sums previously allocated to the IT field. This adjustment roughly translates to a reduction of 0.56% in mandatory tax obligations. Furthermore, if we consider the 2023 government budgetary constraints, mandatory tax obligations were forecasted at 2203.7 billion AMD. In parallel, the supplemental assistance provided by the Republic of Armenia's government to the IT field, as laid out in the decrees, resulted in a reduction of 12.5 billion AMD. Following the implementation of changes in tax laws and subsequent preservation of these adjustments, the discourse indicates an overall decrease of 0.56% in mandatory tax obligations. This measure has been pivotal in enhancing the IT sector and other related fields by offering support in both national and international contexts, providing them with the necessary environment to thrive. Considering that countries hosting IT companies compete through enhancements in investment and business environments to retain these companies within their borders, it becomes imperative for the Republic of Armenia to maintain a favorable regime for their operations. The primary tool for this purpose is tax benefits, with the reduction of income tax specified in the draft of the income tax law being particularly pertinent to this sector.