Friday, Reducing Tax Burden ‘Key’ To Economic Growth • Astghik Bedevian Armenian Minister of Finance Atom Janjughazian The Armenian government plans to reduce the burden of direct taxes as it considers it to be key to economic growth, according to a minister. “But lower direct taxes at least in the short term and medium term imply risks that there will be less budget revenues,” Minister of Finance Atom Janjughazian told journalists on Thursday. “As we also have a ceiling for our debt, we would have to refocus from taxing capital and revenues to taxing consumption,” he added. At the same time, according to Janjughazian, the government has found it reasonable to refrain from changing the value added tax, which is the main source of revenues, since it contains risks from the point of view of the country’s competitiveness. “There are not so many options left and in taxes on consumption it is excise taxes and taxes on certain types of activities where the tax burden can be revised. Somewhere the rise will be higher, somewhere it will be lower…It’s another question whether it is good or bad,” he said. Workers of a number of currency exchange offices and pawnshops have been holding protests against a considerable rise in their license fees envisaged by the package of planned reforms. Opponents have criticized the government of Prime Minister Nikol Pashinian for his economic policies in this regard, claiming that the changes will hit small and medium-sized enterprises. The Armenian National Congress party of ex-president Levon Ter-Petrosian, which has supported the Pashinian government politically, joined the criticism on Wednesday by outlining possible risks that it said the planned reform of the tax legislation poses to small and medium-sized businesses. In its statement the extra-parliamentary party particularly pointed out risks of raising license fees for currency exchange offices and lending organizations. Meanwhile, Minister Janjughazian said: “Any change may lead to the change in the behavior of the consumer, and hence it may affect a particular type of activity or an entity engaged in that type of activity. It is impossible to have regulation that will have an equal effect on all and all will be equally satisfied with it.” As to whether the government may consider lowering the tax burden in connection with certain discontent in some sectors, Janjughazian said: “As discussions are not over yet, changes are possible in any direction.” The minister said the draft amendments to the tax legislation may be sent to parliament as early as next week. Armenian Security Chief Vows ‘High-Profile Revelations’ Soon • Ruzanna Stepanian Artur Vanetsian, director of the National Security Service of Armenia, 22 March, 2019 Armenian’s National Security Service (NSS) will present new “high-profile revelations” soon as part of its ongoing anticorruption efforts, the powerful agency’s chief told RFE/RL’s Armenian Service on Friday. Artur Vanetsian was in parliament today to present a report and answer questions from lawmakers sitting on the standing committee on defense and national security. To the observation that Prime Minister Nikol Pashinian recently voiced his dissatisfaction with the lowered efficiency of law-enforcement agencies’ fight against corruption, Vanetsian said: “I am also dissatisfied with the work of the law-enforcement agencies, especially the NSS, because the pace of the work that we did at the beginning of our activities has somewhat declined.” As for the reasons, the NSS director explained it by the fact that “the legal basis should be very firm so that no speculation can be possible about our work afterwards.” “We have been acting strictly in conformity with the law and tried to do everything in order that all requirements of the law are met,” said Vanetsian. “But there will be high-profile revelations in the near future,” he added, without elaborating. In presenting his report to the parliamentary committee Vanetsian repeated that since last May when he took over as NSS director there has been an increase in the number of applicants seeking jobs in the agency. He also raised the issue of providing more training facilities for NSS employees to keep improving their qualifications domestically. Former Official Skips Interrogation In Panama Papers Probe • Naira Bulghadarian Armenia - Parliament deputy Mihran Poghosian at a session of the National Assembly in Yerevan, 19 May 2017 A former senior official and lawmaker invited by the Special Investigation Service (SIS) for questioning as part of a reopened investigation into his alleged secret offshore accounts exposed by the Panama Papers has skipped the interrogation, a spokesperson said on Friday. Marina Ohanjanian told RFE/RL’s Armenian Service that Mihran Poghosian did not appear for the planned interrogation, explaining that he is currently abroad. Poghosian asked the investigators to question him in a video conference, but the SIS refused to do so “since no such procedure is envisaged by law”, the spokeswoman said. “The body conducting the investigation again invited Poghosian for questioning, suggesting that he indicate the date of his return to Armenia,” Ohanjanian added. The SIS representative reported no other details related to the case. Citing the leaked Panama Papers documents, the Hetq.am investigative publication reported in April 2016 that Poghosian, the then head of an Armenian state body enforcing court rulings, controls three shadowy companies registered in Panama. It said Poghosian had the exclusive right to manage Swiss bank accounts of two of those firms. After initially denying the report, Poghosian announced his resignation later that month. But he stopped short of admitting any wrongdoing. The SIS launched a criminal investigation in connection with the Hetq.am report shortly after Poghosian’s resignation. It closed the criminal case in January 2017, saying that it found no evidence of Poghosian’s involvement in “illegal entrepreneurial activity.” Poghosian had close ties to then President Serzh Sarkisian and his Republican Party of Armenia (HHK). He was elected to the former Armenian parliament on the HHK ticket in April 2017. Armenian media outlets had for years accused Poghosian of having extensive business interests. In particular, the 42-year-old was widely regarded as the main owner of Katrin Group, a company that enjoyed a de facto monopoly on banana imports to Armenia until last year’s “velvet revolution” that toppled Sarkisian. He always denied owning any lucrative businesses. Shortly after the revolution the State Revenue Committee (SRC) launched a tax evasion inquiry into Katrin Group and three other firms linked to it. They promptly admitted failing to pay a total of 600 million drams ($1.2 million) in taxes, leading the SRC to stop the criminal proceedings. The SRC reopened the probe a few weeks later, however, saying that it has discovered evidence of greater tax evasion on the part of the four business entities. Coverage Of Armenian Army Insurance Fund Further Extended Armenia - Armenian army soldiers are lined up at a military base in Tavush province, 2Dec2016 A special army insurance fund set up to pay compensations to the families of soldiers who die or become gravely disabled while on combat duty will extend its coverage, the Fund’s Board of Trustees decided at its meeting on Friday. Originally, the compensation scheme financed from the fund to which every working Armenian citizen contributes 1,000 drams (just over $2) per month covered cases registered from 2017 onward. Under the new government of Prime Minister Nikol Pashinian the fund last year extended the coverage of its compensation scheme to incidents that happened also in 2015 and 2016. The compensation scheme allows the closest relatives of soldiers killed or gravely wounded while on combat duty to receive 10 million drams (about $20,600). Wounded soldiers suffering from less serious disabilities are paid 5 million drams. In addition to these one-off payouts, the families of killed or maimed army officers, contract soldiers and conscripts are to receive monthly pensions ranging from 100,000 to 300,000 drams for 20 years. The Army Insurance Fund’s Board of Trustees decided today that beginning on April 1 benefits will also be paid to servicemen who were killed or wounded in the period from 2008 to 2014. The meeting was chaired by the Chairman of the Board of Trustees, Minister of Defense Davit Tonoyan. During the meeting Varuzhan Avetikian, the Fund’s executive director, presented a summary report on compensations and contributions made since the beginning of 2018, stressing that at the moment the total amount of money in the fund has exceeded 14 billion drams (about $28.8 million), while the total amount of compensations has totaled 941 million drams. According to the Ministry of Defense, earlier a decision was also made to consider the possibility of extending the coverage of the compensation scheme to incidents that occurred before 2008. Members of the Board also pointed out that the assets raised through the management of the fund in 2018 exceeded the amount of compensations, which they said “once again proves the high efficiency of the Army Insurance Fund’s activities.” Armenian Investigators Probing Allegations Of 1998 Election Fraud • Ruzanna Stepanian Vahan Shirkhanian, a former deputy defense minister of Armenia, 20 March, 2019 The Special Investigation Service (SIS) is looking into claims made recently by a former senior official about massive falsifications during the 1998 presidential election that allegedly gave victory to then Prime Minister Robert Kocharian, a spokesperson said on Friday. Marina Ohanjanian said probing other assertions that former deputy defense minister Vahan Shirkhanian made in an open letter earlier this week, including that Nairi Hunanian, the leader of a group that carried out a deadly attack on the Armenian parliament in 1999, was a National Security Service (NSS) agent, is “outside the scope of the SIS’s powers.” Meanwhile, earlier on Friday director of the NSS Artur Vanetsian neither confirmed, nor denied Shirkhanian’s claim that Hunanian was an agent, referring journalists to the SIS that he said led the relevant investigation. He also said that the entire related information will be published after a “special procedure.” In his letter Shirkhanian, who occupied the senior Defense Ministry post in the 1990s and is now facing coup charges in a trial of a group of individuals arrested in 2015 and accused of plotting to seize power, claimed that the then head of the NSS Gorik Hakobian presented to Kocharian and military prosecutor Gagik Jhangirian “a file with the case of NSS agent Nairi Hunanian”, but that file later allegedly disappeared. Hunanian led an attack in which then Prime Minister Vazgen Sargsian, Parliament Speaker Karen Demirchian and six other senior lawmakers and government members were killed. Hunanian and five other members of his group were convicted on charges related to the attack and sentenced to life imprisonment in 2003. Another member of the group was sentenced to 14 years in prison, but did not survive his term. In his letter Shirkhanian also claimed that Kocharian falsified the outcome of the runoff of the 1998 presidential election with Demirchian, a former leader of Soviet Armenia who made a political comeback and reemerged as quite a popular figure less than a decade after the USSR’s collapse. Demirchian conceded defeat and later allied himself with then powerful defense minister Sargsian. The duo went on to win parliamentary elections the following year. Their tandem remained powerful in the country for several months until the October 27, 1999 terrorist attack in which both were assassinated. Armenian opposition groups for years alleged that despite the arrest and trial of the immediate perpetrators of the attack its real mastermind has never been revealed. Kocharian, who served as president for two consecutive five-year terms in 1998-2008, is currently in pretrial detention on charges of overthrowing the constitutional order in connection with the 2008 post-election crackdown on the opposition during which eight demonstrators and two security officers were killed. Kocharian denies the accusations as politically motivated. New Envoy Reaffirms U.S. Commitment To Assisting ‘Sovereign Armenia’ Armenian Prime Minister Nikol Pashinian meets with newly appointed U.S. Ambassador to Armenia Lynne Tracy, Yerevan, The newly appointed ambassador of the United States to Armenia has reaffirmed her government’s commitment to assisting “sovereign Armenia” as she was received by the South Caucasus nation’s Prime Minister Nikol Pashinian on Friday. “Thankful for the warm welcome, [Ambassador] Lynne Tracy said she was honored to meet with Prime Minister Pashinian and reaffirmed the U.S. Government’s strong commitment to assisting sovereign Armenia in implementing its democratic agenda and anti-corruption efforts, dealing with economic and regional bottlenecks, as well as in matters of international security,” a statement published on the Armenian premier’s official website reads. “The U.S. Ambassador gave assurances that during her tenure she would make all necessary efforts to promote the development of bilateral economic cooperation,” it adds. According to the same source, welcoming the newly appointed U.S. ambassador, Pashinian emphasized that the Armenian government is “interested in the continued development of partnership with the United States, including in the political and economic spheres.” The Armenian prime minister said that “Armenia is consistently heading along the path of democratic reforms by fighting against corruption and monopolies, promoting human rights and freedom of speech.” In this respect, Pashinian stressed the importance of building closer ties of cooperation with the United States and implementing joint programs in the aforementioned areas, the statement reads. According to the premier’s official website, during their meeting Pashinian and Tracy discussed a number of issues that are on the agenda of U.S.-Armenian relations and exchanged views on the Nagorno-Karabakh conflict settlement process and other regional issues of mutual interest. Press Review “Zhoghovurd” reports that Yerevan’s prosecutor has asked Mayor Hayk Marutian to provide documents and data on construction or lease of property located in territories of common use in the city center. “In fact, the law-enforcement system has finally got down to inspecting the legality of actions of the former Yerevan authorities, a move that many have been eager to see, because the center of the capital for years has consistently been distorted,” the paper writes. The editor of “Aravot” writes: “In Armenia, no doubt, there are political groups and politicians that in one way or another associate their aspirations with the support of Russia. Many of them are working closely with the political circles of this country, receive or send “messages”. “To hand over Nagorno-Karabakh to the Russian mandate” is among such messages. The proposal, in my opinion, is unacceptable, because if you voluntarily give up some part of your sovereignty, the one who receives it will feel more free to impose on you one decision or another. I think that, on the contrary, one must strengthen the sovereignty of the people of Nagorno-Karabakh and in this regard the efforts of the prime minister to engage representatives of Nagorno-Karabakh in the negotiations are correct in principle.” “Zhamanak” reports on the statement of three political parties in the parliament of Nagorno-Karabakh where they speak about an independent and sovereign state and a prospect of a united Armenian state. The parties stress that other processes today are “artificial and dangerous”. “The statement of the Nagorno-Karabakh parliamentarians, no doubt, concerns, on the one hand, the recent initiative of the Sasna Tsrer party to start the collection of signatures in support of Nagorno-Karabakh’s incorporation into Armenia and, on the other hand, the statement of former Karabakh defense army commander Samvel Babayan’s statement about transferring the Nagorno-Karabakh issue to the Russian mandate,” the daily concludes. (Lilit Harutiunian) Reprinted on ANN/Armenian News with permission from RFE/RL Copyright (c) 2019 Radio Free Europe / Radio Liberty, Inc. 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org