There is a noticeable outflow of IT specialists from Armenia

YEREVAN, March 5. /ARKA/. IT specialists and companies that relocated to Armenia in 2022 and 2023 mainly from Russia are now moving to more developed and competitive countries, expert Sevak Hovhannisyan said in the Armenian Parliament on Tuesday during the discussion of amendments to the country's IT legislation.

According to him, long-term tax incentives can help solve this problem.  "Aggressive tax incentives are applied in competing countries. Today Yerevan is a rather expensive place to live. The cost of living here is almost commensurate with Warsaw or Tallinn. The same can be said about rent prices. Even in Tallinn renting an apartment is 22% cheaper," Hovhannisyan said.

Nevertheless, as Hovhannisyan noted, despite all good intentions, the migrant companies, which were previously located in Armenia, are now actively moving to Georgia, where they are offered more comfortable conditions. 

The expert reminded that the IT sector is the most dynamically developing sector of Armenia's economy and that the sharp growth of the sector in 2022 was mainly due to the inflow of IT companies from Russia.

According to the data he cited, the turnover of the domestic high-tech industry  reached AMD 589 billion in 2022 (corresponding to 7% of GDP). 

"During this period, greater growth was shown by the relocated companies. The average salary in the sector amounted to AMD 1 million, which is 3.8 times higher than the average salary in the country," Hovhannisyan said.

He is confident that tax benefits will allow retaining good specialists in the country, and the development of the IT sector will also contribute to the stabilization and progress of Armenia's economy and security. 

In December 2023, the Armenian parliament extended the tax benefits for IT startups for another year (until the end of 2024; they provide for keeping the personal income tax rate at 10% (for other sectors of the economy it is 20%).

According to the Armenian government, 2,304 newly-formed technology companies received tax benefits from 2015 to November 8, 2023, of which 1,633 in 2023. --0--

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22:22 03/05/2024