| Summary: | This technical assistance report on the Republic of Armenia discusses personal tax policy and presents the policy review and introduction of a universal declaration. Costly and regressive tax incentives should be repealed. A Universal Personal Income Tax (PIT) Declaration makes it possible to implement a more progressive PIT. A microenterprise regime should be a simplified collection mechanism, not a preferential regime. While the detailed Policy is being developed, it is essential that the State Revenue Committee (SRC) and Ministry of Finance work together on the detailed design. This is to ensure that it can be implemented efficiently and effectively with low costs of compliance by the taxpayers. The mission team recommends that in line with international good practice, SRC prefills the Universal Declaration as much as possible through maximizing the use of third-party information and withholding taxes. The authorities may consider requesting assistance on a possible reform of the taxation of micro and small enterprises. The SRC may consider requesting capacity development assistance from the IMF on implementation of the Universal Declaration. The area that may be of greatest assistance is addressing the risks identified and advising on international good practices to mitigate them
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