VOTE ON LEGISLATIVE PACKAGE ENVISAGING NEW LOCAL TAXES POSTPONED AT NATIONAL ASSEMBLY

Noyan Tapan
Feb 4, 2010

YEREVAN, FEBRUARY 4, NOYAN TAPAN. The RA National Assembly on February
4 finished the discussion (in the first reading) of the legislative
package envisaging amendments and additions to the Law on Taxes, the
Law on the Budget System, and the Law on Local Self-Government. The
vote has been postponed until the next four-day session. According to
the main speaker, First Deputy Minister of Territorial Administration
Vache Terterian, the government will examine the proposals of NA
deputies and then present its position.

In this legislative package, the government in particular proposes
establishing a list of local taxes. In addition to the currently used
property tax and land tax, it is proposed including 8 new local taxes
in the list, namely: hotel tax, sales tax, incompleted construction
tax (or tax on improperly kept real estate), tax on uncultivated
agricultural lands, tax on no-purpose use of land plots envisaged for
development, tax on placing advertisements on facilities considered
as community property, tax on a parking place for vehicles, and tax
on the occupation of public areas. The use of land tax and property
tax will be mandatory in all the communities, while the use of other
local taxes and their rates will be determined by the community
council after their presentation by the community head.

The opponents, including some representatives of the ruling coalition,
considered it inadmissible to increase the tax burden under conditions
of the financial and economic crisis. The opposition parliamentary
factions – "ARF" and "Heritage" opposed the package. The head of
"Heritage" faction Styopa Safarian called it a bill of "racket".

The head of the "Country of Law" faction Heghine Bisharian proposed
that the government should amend the bill and then submit it again
to the National Assembly for discussion and approval. She said that
if the proposals of their faction are accepted, they will "definitely
vote for the bill".

The legislative initiative was backed by "Republican Party of Armenia"
faction, on behalf of which RPA member Karen Tchshmaritian declared
that the bill is largely acceptable and it contains the main idea of
the communities’ development because the full amount of local taxes
will be transferred as income to the budget of the given community. In
his words, the bill can be amended, but the idea forming its basis
should not be rejected.