ARMENIAN GOVERNMENT AGREES TO REDUCE PREVIOUSLY PROPOSED LIST BY SIX LOCAL TAXES

Noyan Tapan
Feb 22, 2010

YEREVAN, FEBRUARY 22, NOYAN TAPAN. The RA National Assembly on
February 22 passed in the first reading the amended version of the
legislative package envisaging amendments and additions to the Law
on Taxes, the Law on the Budget System of the RA, and the Law on
Local Self-Government. The package was passed with 71 votes in favor,
20 votes against, and 7 abstentions.

The package had been discussed at the previous four-day session,
and the vote had been postponed based on NA deputies’ proposals
to amend it. The preliminary version envisaged a list of local
taxes. In addition to property tax and land tax considered as state
taxes, that version proposed 8 new local taxes: 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
lands envisaged for development, tax on placing advertisement on
facilities considered as community property, tax on vehicle parking,
and tax on occupation of public areas.

After additional discussions with NA deputies, the government agreed to
reduce the list of local taxes by removing 6 new taxes from it. The
amended version included 4 local taxes: property tax, land tax,
hotel tax, and tax on vehicle parking.

By the legislative package, the use of land tax and property tax
is mandatory in each community, while the use and the rates of the
other local taxes will be determined by the community council on
recommendation of the community head. Later a separate law on each
of these taxes will establish their peculiarities, including the
upper and lower limits of their rates. Local taxes as revenues will
be transferred to the budget of the community where they have formed.

ARF faction and a number of independent deputies voted against this
legislative initiative of the government, while Heritage faction
abstained from voting.