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The Struggle for Visibility: Women Entrepreneurs from Artsakh Face Challenges Gaining Market Recognition
Large and small jars (vessels) full of Artsakh pickles are evenly lined up in the dark basement of the rented house. These are Victoria’s pickles, waiting for the next recipient. She learned to pickle from her mother. Now she sells them. They turned their beloved work into a small business after the forced displacement, called “Fresh Pickle Assortment.” They work from home. The three-room rented apartment serves as both a workshop and a warehouse. Victoria makes pickles, and her husband, Armen, delivers them.
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They began to think about having their own business shortly after the displacement, when the issues of camp, work, and children’s education had been somewhat settled. Something had to be done to provide for the family’s and children’s needs. Victoria understood this well; they could not rely on benefits and support. They decided and did it.
“A few months after the relocation, in June 2024, “Fresh Pickle Assortment” was already on sale. A month later, we had a page on social media, which brought us recognition, and the number of customers gradually increased. Now we have loyal customers; there is even a restaurant that always buys pickles from us. There are 2 of us, we have no helpers or financiers, we work with our hopes on ourselves.”
She doesn’t complain; the conditions could have been worse, the landlords could not have allowed it, but on the contrary, they encourage it. And in terms of moving forward and increasing volumes, their customers also encourage and motivate them.
Solution: learn marketing or contact a marketing specialist
Although Victoria doesn’t like to complain and has found her own small solution to finding her customers in a new market, recognition is a serious problem for newly founded businesses. This is a particularly serious problem for those who settled in Armenia after being forcibly displaced from Artsakh. They are not recognized, and they often struggle to establish contacts, build trust, and make sales.
“Every newly created business goes through the same stages that are necessary for sustainable development. Initially, you need to become recognizable, then arouse people’s interest so that they want to buy your product. Every business must overcome these stages, regardless of where its founders are from,” says marketing specialist and founder of BIB Marketing Agency David Gabrielyan.
According to him, to successfully pass through these stages, it is essential to utilize marketing tools systematically. Business initiators can contact a marketing specialist or learn marketing on their own.
By the way, the 1st marketing company founded in Artsakh, BIB Marketing Agency, founded by David, offers up to 50% discount on a wide range of marketing services and courses.
SMM – one of the most effective tools
According to David Gabrielyan, the speed at which a business becomes recognizable depends on various factors: the type of business, the size of the market, the number of competitors, the advertising strategy, etc. “However, in the conditions of Armenia, 2-3 months is enough to gain some recognition and register initial sales.”
He says that social media has become one of the most effective tools for business promotion today. “If the market in Artsakh was small, here the market is quite large, the competition is quite strong. It is necessary to prioritize marketing expenses. If they can’t make it, at least they need to learn marketing and personally engage in promotion.”
Marketing specialist Shoghik Vardanyan also notes that Armenia is currently one of the countries with the cheapest prices for Facebook and Instagram advertising in the world. “I believe that, for example, by allocating 40,000-60,000 drams per month from the business budget, it is possible to solve the problem of recognition in a fairly short period of time, in a few months. However, it is also very important to pay attention to the quality of the content,” he says.
“I only need customers.”
“We work with everyone, individuals come and say, ‘Someone broke the glass in my house,’ we cut it, factories come and cut it,” says 33-year-old Elina from Artsakh.
After the forced displacement, she and her husband established a small factory for Eurowindows in the village of Mkhchyan, Ararat, to support their large family. They have 6 minor children. “My parents also live next door to me, they have a disability status. My father has a heart condition, he takes medicine worth 74,000 drams every month. My mother also has serious health problems, I take medicine worth 170,000 drams for my mother every 6 months,” says Elina.
When asked what she did in Artsakh, Elina answers with a smile: “I was a mother of many children in Artsakh, a housewife, and at the same time I baked cakes to order at home, sewed scarves, and drove a taxi.” Of all these jobs, Elina only worked as a taxi driver in Armenia. She says she drove a taxi to “get to know the scum.”
After the forced displacement, Elina developed illnesses. “I have early diabetes, neurosis, my blood is thick, my right hand is numb and doesn’t work. I also have thyroid problems. They prescribed sedatives, I don’t drink, they numb me. If I drink, I can’t do anything (children, home, work, it doesn’t work out).”
Before the forced displacement, Elina’s husband served in the Artsakh Defense Army, he had never done anything else, he had learned glassmaking from a friend, his friend’s workshop was next to the house, he would go and help. After moving and establishing the workshop, Elina also learned glassmaking from her husband.
Elina pledged her gold to start the business. Then she participated in one of the programs and courses of the International Committee of the Red Cross (ICRC), received support of 600,000 drams and invested it in the business. Yekumut does not cover the expenses. “It’s a good business if there are customers. We pay rent for the house and workplace, we pay off the mortgage, I support a large family. My expenses are very high, and at the moment the business is completely at a standstill.”
Elina needs money now, but she doesn’t want to ask anyone for money, she wants to earn money with her own sweat. She says, “I only need customers.”
Cost-effective marketing: what costs can be avoided
Marketing specialist Shoghik Vardanyan gives advice on how to use the most effective tool for recognition – SMM – with minimal costs. According to him, firstly, if the business budget is limited, then it makes no sense to hire an SMM specialist, taking into account the fact that in addition to the costs of creating content, placing advertisements and other similar costs, you have to pay for the work of a specialist.
“The second thing that can be saved on is the amount of content. If, for example, there is a product that needs to be filmed, and, let’s say, one filming costs 30-40,000 drams, you can not do it every day or even every month. But you can film once and try to use the resulting materials for as long as possible.”
According to the specialist, you can also save on the advertising budget. For example, to conduct a small test (trial) on several different types of advertising content to see which is more effective, and then direct the entire amount of money to the successful option.
“The most important thing in business is emotions, because as long as a person does not feel any emotion related to the content or communication presented by that business, he will not remember the brand and will not proceed to the next step – making a purchase,” the specialist, for example, suggests that Artsakh businesses add some Artsakh element to their promotional campaigns, for example, using the dialect. This can also be a distinguishing element from other businesses.
According to Sh. Vardanyan, in today’s conditions of great competition and, at the same time, the great equality provided by the Internet, it is important for a business to find its uniqueness, which distinguishes it from others. Using advertising or promotional tools is not enough if there is no creative and distinctive content. “Believe me, once you find it, the brand can start to spread and grow like a snowball effect, even uncontrollably.”
Author: Aspram Avanesyan
The material was prepared within the framework of the “Support to Women Entrepreneurs” program by the “Point 33” NGO with the support of the Embassy of the Kingdom of the Netherlands in Armenia. The author is solely responsible for the content of the material, and the views expressed therein may not coincide with the views of the Embassy.
Raising money: a big problem at the beginning of a business
When you are just starting a business and don’t have access to financing, you face various challenges. Naira Poghosyan, a 48-year-old who started her own business after working as a translator for many years, shares her experience.
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In 2021, Naira founded a negotiation skills coaching service. She says that this service is in great demand. These services are utilized not only by individuals seeking to develop negotiation skills but also by those seeking solutions to various business or personal issues. “When a person presents their problem, a deadlock in some relationship, the coach tries to help them find solutions and ways out by asking the right questions,” says Naira.
In search of financial resources, Naira turned to no one. “For example, in Europe, the state provides interest-free loans, and there is state support for newly created businesses, but in our country, there is none. I have not found any support. In Armenia, we want to develop the economy, but we only strangle and destroy the taxpayer; we give nothing else.”
Having given up hope in the state, Naira also turned to various private organizations, but there, too, her expectations were not met. “Yes, there are organizations that give grants, but when you go to participate, there is such fierce competition, they may not like you for your competence. If you are a little weak, you can lose your head. I have participated in 4 different programs, of which, for example, the “Jinishyan” Memorial Foundation provided loans at a very low interest rate (with a program aimed at improving the business environment in the region and increasing the competitiveness of the private sector, – ed.), but they wanted real estate collateral, and my family would not help me with that.”
Naira managed to convince one of her close friends, who had expressed a willingness to finance her idea and start a business, to support her in pursuing her business idea. “I have only studied the business side of coaching for two years. It is a highly paid service available worldwide. For example, in Russia, coaches can charge $2,000-5,000 for one session, in the Gulf countries it is even more – you can earn up to $30,000 in half a month. In Armenia, one session currently costs 25,000 drams.”
Finding investors is a problem
Economist Suren Parsyan says that attracting financial resources is one of the most important issues in business. He mentions several sources of attracting financial resources, including investing one’s own savings, taking out loans, and making investments. In the case of the latter, the business idea is of great importance.
“Many are ready to invest their money in projects that aim to expand not only in the domestic market, but also abroad, and few such projects are prepared and presented in Armenia. We really have a problem with starting start-ups with interesting ideas.”
Naira Poghosyan also notes that you can have “a million good ideas, a calculated plan, a financial analysis,” but the investor will not be interested in it. And the reasons for “not being interested” are different: for example, they may invest not because the project is realistic or they believe in its success, but because the author is their acquaintance, friend, or close friend.
She also talks about several problems in this area: “We like to invest quickly, withdraw quickly. We don’t look at the long-term, and we look down on people who don’t have financial resources. They look down on people like that. Then they can listen to you, implement your idea without you, and that’s another problem.”
According to Naira Poghosyan, constant rejections can break a budding entrepreneur. “From my personal experience, I can say that you have to be strong enough not to give up, to believe that you will find a way out if you have a desire to do something.”
According to Karine Ghukasyan, a member of the board of the SME Association and founder of the “Laktina” brand, the art of dialogue and persuasion is important for attracting investments. And considering that female entrepreneurs start their business with smaller steps, investments from the family budget can also be a solution: “Women’s investments are not so much that they are a burden on the family. It is likely that the amount of money needed to start a business is comparable to buying a house: a TV, furniture, etc. “Within that amount of money, our women have so many good ideas. We need the art of dialogue and persuasion.”
Grants for women who want to start a business
Grants are one of the sources of business financing. You can often come across announcements about them on social media and in the news.
Grants of up to 2 million drams – financial support for women entrepreneurs – are provided by the Armenian General Benevolent Union (AGBU) under the “Women Entrepreneurs” program.
Tatevik Manukyan, head of the AGBU “Women Entrepreneurs” program, says that the program participants go through several stages of selection. In the first stage, the applications of the applicants are read and evaluated by at least 3 specialists. The authors of the applications that received high marks are invited to an interview in the next stage, during which the motivation of the participant, willingness to work, competitiveness of the business, and prospects are important.
Those who pass the interview begin the main phase of the program: they participate in 3-4-month business courses, develop their business plan, working with various specialists, including a business consultant.
In the next stage of the program, business plans are submitted to receive grants. Tatevik Manukyan notes that the grant provided to the winning participants is transferred to the bank account of the registered business. Within a year, they must use the allocated amount to cover the expenses envisaged in their business plan, and during that 1 year, AGBU monitors their activities and receives reports from the participants on business acquisitions. She notes that the maximum grant amount is 2 million drams and the amount is given taking into account the needs of the business. “For example, it is possible that the participant needs to acquire fixed assets of 1.5 million drams to develop the business, naturally, the participant’s business plan is considered and the amount is provided according to the business need.”
The state’s response to supporting women entrepreneurs
In response to our question about whether the state has mechanisms to provide low-cost loans to start-up women entrepreneurs or assist them in attracting finance, the Ministry of Economy responded:
“The programs of the Ministry of Economy are broad-based and do not target specific groups, and state policy is aimed at ensuring universal support for entrepreneurship and business development, without restrictions on age or social groups. The promotion of women’s entrepreneurship is considered in the context of existing state and international programs.”
And the 5th event of the draft annual program “Coordination and Management of State Support Programs for SME Entities” for 2025 envisages the promotion of women, youth and social entrepreneurship. In particular, it is planned to organize targeted discussions and meetings on entrepreneurial opportunities, state support programs and financing mechanisms.
The section related to the same event states that “the active participation of women and youth in the “From Idea to Business” program will be encouraged.” This program is intended only for financing and providing other resources to start-up technology companies and research teams.
By the way, the Ministry of Economy is accepting suggestions and observations on the draft annual program “Coordination and Management of State Support Programs for SME Entities” at this link.
Author: Arpine Simonyan
The material was prepared within the framework of the “Support to Women Entrepreneurs” program by the “Ket 33” NGO with the support of the Embassy of the Kingdom of the Netherlands in Armenia. The author is solely responsible for the content of the material, and the views expressed therein may not coincide with the views of the Embassy.
Artsakh women initiate businesses and go through “hell’s twists and turns”
Coffee lovers will love Ada’s apartment. The smell of coffee has captivated it. Ada’s “Tesan-Tena” business is there. She started her business in Stepanakert in 2020 after the war. Initially, she sold aromatic coffees and teas online. A few months later, she opened her small shop.
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Ada is not engaged in the usual sale of ground coffee or tea; the uniqueness of her business lies in beautiful packaging and lovely presentation. She makes and sells coffee and tea bouquets, boxes, and other packaging with her own hands. Throughout her career, Ada has not attended any business courses and has no textbook knowledge in this field; she acts according to her feelings, as she sees fit. She is an economist by profession, and before being forcibly displaced from Artsakh, she worked as a chief specialist in the treasury of the Artsakh Ministry of Finance.
After the 44-day war, the state in Artsakh established tax privileges for the business sector. As a business opened in the post-war period, “Tesan-Tenan” was exempt from all types of taxes. Before the blockade of Artsakh by Azerbaijan, the business worked smoothly, providing a stable income. Each subsequent month of the blockade brought with it new difficulties for business. And after the 10-month blockade, as a result of the armed attack of Azerbaijan, 120 thousand Armenians were forcibly displaced from Artsakh, moving to Armenia. Here, they were forced to accept new rules of the game.
“After the displacement, my clients asked to continue their business in Armenia. You know about the rents for the premises, they are expensive, very expensive, but we decided to open, resume business, open a store,” says Ada Sargsyan.
Hopes and expectations were not justified, rents and taxes were high, and income did not cover expenses. After 8 months of struggle, Ada closed the store, but she has no intention of closing the business. Before opening a store in Armenia, they had calculated all the costs, she says, but they didn’t choose the right place for the store; they had to move to the center of Yerevan, where they didn’t have the financial means. The store closed, but the regular customers continued to come. She says she has put a lot of effort and energy into this business, and she will continue, despite all the difficulties. “This business is a blessing for me.”
He did not use any privileges in Armenia to continue his favorite business; on the contrary, instead of 5%, he already pays 10% turnover tax, like everyone else. “The privilege is not exemption from taxes; the privilege will be for the state to help attract finance, for example, implement grant programs.”
No privileges, but there is an increase in taxes
In post-war Artsakh, businesses multiplied thanks to the state’s policies. Some businesses were exempt from taxes. This is what Sofia Hovsepyan, coordinator of the Artsakh Social Development Foundation, says. “People understood that they had to start something, do something, that they could not rely on the state, receive benefits, and live on it.”
However, in Armenia, not only are there no privileges, but the tax burden is also being tightened, applying to everyone without regard for the needs and capabilities of different businesses. For example, as of January 1, 2025, the turnover tax has been doubled.
“The law was passed to be equal for everyone, and in reality, this law will also crush local businesses, since no privileges or advantages are given to people to develop their business. This will force people to act secretly or simply close down and leave the country,” says Sofia Hovsepyan.
In her opinion, many Artsakh residents do not leave Armenia in the hope that they will still manage to do something here and will stay in their homeland, but if they cannot earn enough money and have a decent job, they will leave the country. “That would be a huge loss for the Republic of Armenia, and a closed door for the vision of returning to Artsakh.”
“It took a long time to prove that I can bake good bread, too.”
After being forcibly displaced from Artsakh, Karine worked for some time at the Public Radio in her profession as a sound director and editor. Then she went to Russia for a short time to work there. After returning, she was ashamed to go to the radio again for work, she could not stay idle, so she got a job in one of the supermarkets in Artashat.
And one day she saw an announcement on social networks about a grant business program for Artsakh residents. The Armenian Foundation for Sustainable Development was the implementer. She sent the application, wrote a business plan, and became one of the 15 winners.
Some of the necessary equipment for the bakery was purchased through grants, while the rest was funded by her own resources. Karine opened the “Ari Ojakh” bakery in Masis because in Artashat, where they live, the rental fees for commercial premises are higher. This means she spends time and money on the road.
“There are 4 such factories next to my workshop in Masis, they have more experience, they have been working for a long time. It took me quite a long time to get a customer. It took me a long time to prove that I also produce good bread and that people can buy it from me,” says Karine. The jewels of the business are the zhengyalov bread and baklava; people order it again after trying it once.
Her husband and 2 sisters help her. She says she doesn’t see her daughters’ faces, she is at the workshop from morning to night, she leaves at 5 in the morning and gets home at 8-9 in the evening.
Having state benefits, she says, will of course play a big role in the development of the business. “If the state helps with money for 6 months, I will manage to buy at least a refrigerator for cookies and cakes, it is very necessary, but I can’t afford it.”
Karine has big plans for this business; they plan to increase volumes and income.
Instead of giving the fish, it is better to give the hook
The Armenian business market is a new environment for the people of Artsakh, which they must first get acquainted with, then adapt to and be ready for changes. It is mandatory to be constantly informed and flexible, says business expert Hripsime Kocharyan.
“One-time support is important as a first aid, but then it would be better to implement educational programs and educate entrepreneurs, and organize some events. Instead of giving the fish, the state would do well to give the hook, and let the beneficiary catch the fish,” says Hripsime Kocharyan in an interview with us.
The state has no support programs for Artsakh entrepreneurs and does not have data on how many of the forcibly displaced Artsakh residents have started businesses
Is it known how many Artsakh residents have established businesses in Armenia after being forcibly displaced? We tried to find out from the Ministry of Justice. In response to our inquiry from the Ministry’s State Register of Legal Entities Agency, they informed us that from September 19, 2023, to March 24, 2025, 292 legal entities and 70 individual entrepreneurs were registered. However, these are general data, and there is no information on how many of these were registered by displaced Artsakh residents.
We asked the Ministry of Economy about the support programs implemented for those forcibly displaced from Artsakh. The response states that there are no separate programs. “…The Ministry of Economy of the Republic of Armenia does not implement separate support programs for citizens forcibly displaced from Nagorno-Karabakh; however, they can benefit from state support programs developed by the Ministry. We also inform you that the Ministry does not conduct separate registration of citizens forcibly displaced from Nagorno-Karabakh.” It is also noted that in some programs, there are certain privileges for Artsakh residents. However, the response mentioned only one program, the “Measures for Involving Workers in the Developing Industry” support program implemented in cooperation with the State Revenue Committee. According to the State Revenue Committee, as of January 22, 2025, 78 beneficiaries had applied to the program, 33 of whom were displaced from Artsakh.
“The state has the potential and should support”
Yes, there are many problems for Artsakh businessmen in the Armenian business market: high rents for the premises, recognition, attracting finance, enduring the tax burden, etc. Economist Hrant Mikaelyan says that the state should help these people temporarily taken under its protection to solve these problems.
In his opinion, the right direction would be for the state to provide low-rent areas to Artsakh residents to develop their business. “For example, a business center could be created, with office or perhaps commercial space, where the businesses of Artsakh residents would be located. This would also allow them to work together and solve the problem of adaptation,” the economist believes, considering this option of state support to be quite promising.
The economist also notes that the Republic of Armenia has the potential to ease its tax burden. “For example, we need to provide preferential loans so that they can start a business. Here, perhaps, the tax should not be 0%, but it should be, let’s say, half of the general rate.”
In addition to all these issues, there is another important issue: to ensure conditions for non-emigration from Armenia. “It is very important for Armenia to keep the people of Artsakh on the territory of Armenia and we should conduct policy with that assumption in mind. For example, if people stay or if the whole family stays, then more preferential interest rates on the loan should be provided.”
Author: Aspram Avanesyan
The material was prepared within the framework of the “Support to Women Entrepreneurs” program by the “Point 33” NGO with the support of the Embassy of the Kingdom of the Netherlands in Armenia. The author is solely responsible for the content of the material, and the views expressed in it may not coincide with the views of the Embassy.
To be shut down or to raise prices: Small and medium businesses face a dilemma
Close the business or raise the price of goods and services? The new tax cuts, effective from January 1, 2025, have put business owners in a difficult situation.
Hripsime Kocharyan has been producing eco-bags for 5 years. The “Ecobag with me” brand, founded in 2020, collaborates with women with young children and children with health issues. First, they teach them sewing and patterning for free, and then they hire them. Currently, they have 12 employees. They all work from home so that they can easily combine work and childcare.
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“I know, a number of companies will close due to the new tax burden; they didn’t even stand a month. We will not close, because we have an adopted ideology: it doesn’t matter if we don’t generate profit, we must try to provide our mothers with work, this entrepreneurship was created for them, naturally, we strive to generate profit, to have more orders,” says Hripsime Kocharyan.
After its establishment, the production operated as a micro-enterprise, and since 2023, it has been subject to turnover tax. Starting this year, the turnover tax percentage has doubled, which also implies an increase in the price of goods.
“We have not made a difference at the moment, but probably from February-March, whether we like it or not, we will have to increase the cost of each product by 5-10 percent. In the case of 100 pieces, the price of one bag is now 1,970 drams; it will become 2,270 drams.”
According to the entrepreneur, along with the expected inflation, they will face another problem: “If the price goes up, then buyers will look for an alternative option, we will also have a sales problem – a reduction in quantity. As a result of tax increases, we will also have a reduction in the number of employees and working hours.”
According to Hripsime Kocharyan, the tax increases have made women entrepreneurs particularly vulnerable, as they typically have more limited financial resources to invest in their businesses and receive more modest salaries from them.
She also points out that this tax hike was implemented without prior consultation with representatives of small and medium-sized enterprises (SMEs): “They make the decision first and only then consider the opinions of SMEs. It’s not that SMEs don’t want to pay taxes, but those taxes need to be realistic.”
As a result, not only are small and medium businesses facing serious challenges, but price increases are also expected — the rise in taxes will directly affect the wallets of end consumers.
New tax changes
According to the amendments made to the Tax Code, the turnover tax rate has doubled since the beginning of this year.
Accordingly, in the case of trade, the tax has been set at 10% instead of the previous 5%, in the case of production – 7% instead of the previous 3.5%, in the case of the public catering sector – 12% instead of the previous 6% (Tax Code, Article 258).
With the same changes, a number of sectors operating under turnover tax have also begun to operate in the general taxation field. From January 1, providers of advocacy services have been transferred to the value-added tax (VAT) field, and from July 1, 2025, companies providing accounting, legal services and financial consulting operating in the turnover tax field are scheduled to be transferred to the VAT field.
At the same time, a number of types of activities can no longer continue to operate as micro-enterprises and be exempt from taxes, they have also moved to the turnover tax field. This particularly concerns commercial activities in the regions, hairdressing, body care, saunas, steam baths, car maintenance and repair services, intermediary activities – real estate rental and sale, etc.
Business Taxation Regimes in Armenia
In Armenia, businesses operate under general and special taxation systems or regimes. Those operating under the general taxation system are taxed by VAT and/or profit tax. VAT is calculated at a rate of 20 percent, and profit tax at a rate of 18 percent as a general rule (with some exceptions, the rate may be different). That is, in cases where a business pays both VAT and profit tax, the monthly tax payments are 38 percent.
There are two special taxation systems: micro-entrepreneurship and turnover tax regime. In the case of turnover tax, taxes are calculated at a rate of up to 12 percent, depending on the type of activity. In the case of micro-entrepreneurship, individuals are exempt from all types of tax obligations.
All businesses, at the same time, depending on the nature of the activity and other factors, may pay different taxes and fees, for example, environmental tax, road tax, excise tax, etc.
All businesses with employees pay income tax and stamp duty.
Small and medium-sized businesses are targeted
The president of the Small and Medium-sized Enterprises Association, Hakob Avagyan, also says that the consequences of raising taxes and reducing privileges (in particular, removing certain types of activities from the micro-enterprise taxation regime) will be the closure of some businesses and the inflation of goods.
“We talk to regional small and medium-sized entrepreneurs, and they say, no, they have imposed such a burden that is unbearable, we, on the contrary, will go into hiding. In other words, the same tax forecast: 13 billion with one project, 18 billion with another project, additional income will be provided with one project, but that will not be provided either. Because people say, we cannot pay, because it is an unbearable burden.”
According to him, the relevant structures should also have made forecasts regarding the risks of the changes being made. “In other words, the Ministry of Economy should have made that prediction, then written an opinion for those laws. We have had experience working with the previous three governments, and this is the first time I see that they write, ‘I am not against’, to draft laws containing norms that will worsen the situation for small and medium-sized businesses. Therefore, we have what we have.”
As for the government’s observation that micro-entrepreneurship privileges lead to the fact that small businesses do not grow or at some point the increase in turnover is inhibited, Hakob Avagyan notes that small businesses are created and closed all over the world. Some succeed, expand, some close, and some simply decide that this level of development and expansion is enough for them, they consider themselves a “boutique business”.
“That is, it is not a crime when a small business says, I want to stay within this threshold, or when it decides to increase the volume of business.”
Avagyan also spoke about the change to exclude regional stores from the field of micro-entrepreneurship. In particular, according to him, more than 50 percent of SMEs are traders, and small stores operating in border villages and communities actually play a much more important role than just being a store.
“Let’s not forget that the phenomenon of lending goods still exists: one person is given bread on credit, another is given child care on credit… The only hairdresser and dental clinic operating in the region are of equal importance. In other words, to say in such a hasty manner and without deep research that we are eliminating micro-entrepreneurship is wrong, because tax policy leads to balanced economic development, poverty reduction, job creation, etc.”
Either bankruptcy, or emigration, or transition to the shadow economy: economist
“Tax collection has become the main indicator of efficiency for this government. The more taxes it collects, the more the corresponding bonuses increase. Starting from 2018, tax revenues have increased by an average of 15.6 percent every year until 2023, compared to 2014-2018. The growth has been about 5 percent each year. This leads to the fact that SRC employees are not becoming assistants to the economy, but on the contrary, they are interested in collecting taxes from everywhere and placing an additional burden on business entities,” says economist Aghasi Tavadyan, head of the Tvyal.com organization.
According to him, for the first 9 months of 2024, about 8 percent less tax was received by the state budget than was planned by the government. “This is unprecedented, nothing like this has been recorded in the last 20 years. This speaks of the wrong fiscal policy and that this policy is no longer working. In reality, the economy cannot pay additional taxes. Business operators will either exit the market, declaring themselves bankrupt, or go abroad, where the tax policy is more favorable, or they will go into the shadows.”
Government Response
We attempted to obtain a response from the government, specifically the Ministry of Economy and the State Revenue Committee, as to whether the above-mentioned risks have been assessed and whether measures to mitigate them have been planned.
We received the following response from the Ministry of Economy: “In order to alleviate possible risks and concerns of businessmen, the government has developed and is implementing numerous targeted support measures in the form of state support tools of the Ministry of Economy. One of them was adopted just last week, through which we will provide support to companies engaged in export activities, they will be able to use our programs, they will receive certain subsidies. We have other “state support” programs for private business companies, it can be our program for attracting highly qualified specialists, the leasing program, through which they can borrow equipment at 0 interest rates, etc. The list of these programs is large, they can support businesses to avoid closure and be able to increase their turnover. In other words, in essence, privileges are not being reduced, but expanded, a vivid proof of this was the adoption of another support program by the government last week.”
By the time of publication of the article, we had not received a response from the State Revenue Committee.
Author: Arpine Simonyan
The material was prepared within the framework of the “Support to Women Entrepreneurs” program by the “Ket 33” NGO with the support of the Embassy of the Kingdom of the Netherlands in Armenia. The author is solely responsible for the content of the material, and the views expressed therein may not coincide with the views of the Ambassador.
