Tax, Customs, and Fiscal Policy Committee (TcuFP) meeting
|Date||August 11, 2021|
|Venue||Hyatt Place Yerevan|
On 11 August 2021, AmCham in Armenia held a Tax, Customs, and Fiscal Policy Committee (TcuFP) meeting at Hyatt Place Yerevan. AmCham President Mr. Ashot Hovanesian, 2nd Vice President Mr. Gagik Gyulbudaghyan, 9 TCuFP Committee members, and AmCham Executive Team were present at the meeting. The meeting was chaired by Ms. Karine Sarkissian, the Executive Director of AmCham in Armenia.
The Chair of the Meeting welcomed and thanked the TCuFP Committee Members for participating in the Meeting, moderated the discussion, and approved the Agenda
1. Amendment proposal of the RA TAX CODE on the Income-tax return tool for mortgage loans
It was presented that AmCham had a meeting with the Ministry of Economy and the Armenian Developers Association regarding the new draft law on Amendments of the RA TAX CODE on the Income-tax return tool for mortgage loans. The participants presented their viewpoints. It was clearly stated and all agreed that any tax advantage should be given within a specific time frame, otherwise it will become a big burden on the state budget. The advantage was introduced to promote the construction and however, currently it has 2 sides – social and economic, thus somehow raising up satisfaction and happiness among people. There should be clear targets and budget forecasts for any change that will be implemented. In the current situation, such change might create dissatisfaction among the young professionals and trigger emigration. It was stated that the limitation of the income tax return for the primary market apartments worth 55 ml AMD has some risk of shadowed transactions, as in the downtown area in the primary market only studios or one-bedroom apartments could cost 55 ml and the downtown development is quite saturated. Still, there are some underdeveloped areas such as Firdus, Kond, other projects which could suffer. They implied the effect of the Tax Code on all related sectors and everyone shared the opinion that it would be reasonable if the citizens of the RA could be given an opportunity to acquire the second or more real estate in other Armenian regions rather than in the capital, thus having an intention to promote the growth and proportional development of the entire country. Experts concluded that they cannot come up with a proposal as for now because of the lack of precise information from the Ministry of Finance and the Ministry of Economy about the effects and consequences of the law on the above-mentioned spheres from its launch till now. The future tendency based on the present results is also of special importance to clarify. The trigger why the question of amendments was raised in general is also subject to clarification to form a justified standpoint. AmCham TCuFP Committee members will do their contribution and suggestion as soon as they have more detailed information about the Tax Code and its precise effects on all the spheres stated earlier.
2. Identification of Priorities for 2021 with the Newly Elected Government Cabinet
AmCham VP Mr. Gagik Gyulbudaghyan introduced the AmCham Strategic Priorities to focus on. Principally the participants were in line with the priorities and confirmed that all the legislative changes should be run under the Regulator Impact Assessment tool which is provided by the WB and IMF as per their methodology.
3. There was a proposal from FinArm AmCham Member company on introducing a new Residence Tax Scheme which will promote the Immigration into the country. The experts talked about a benchmarking tool, suggesting to study the experience of Israel which has a Ministry of Immigration and Integration, aiming to promote the immigration flow to the country.
The next TCuFP Committee Meeting will be held on 29 September 2021.