Local Tax Rates Increase

The Yerevan City Council is discussing the issue of setting local tax rates for the year 2020 in the Yerevan community. The main presenter on this issue, Armen Harutyunyan, head of the Revenue Accounting and Collection Department of the Municipality, noted that the draft primarily retains the tax rates and types from 2019.

Certain points in the 12th article, part 1 of the Law of the Republic of Armenia on Local Taxes and Fees have been amended. 'For construction permits for main buildings and structures with a residential area of up to 300 square meters and non-residential buildings with a total area of up to 200 square meters, the tax has been set at 105,000 drams for 2020, instead of 75,000 drams allocated for 2019,' Harutyunyan explained and added that these changes do not end here.

For example, according to other points of the same article, the local tax for buildings and constructions with a total area of 200 to 500 square meters has been set at 210,000 drams for 2020, while it was 150,000 drams in 2019. For buildings and constructions with an area of 500 to 1000 square meters, the tax for 2020 has been raised to 300,000 drams from 250,000 drams in 2019. For reconstruction, restoration, strengthening, modernization, and improvement works of buildings, the local tax for 2020 has been set at 21,000 drams, whereas it was 15,000 drams in 2019.

These changes were not approved by the 'Lus' faction in the council. The faction leader, David Khazhakyan, mentioned that increasing local taxes on areas of 300 square meters or less, which could include small kiosks, is unjustified as it could harm representatives of these areas. Faction member Tehina Vardanyan also emphasized, 'Essentially, we are still hitting the lower class; there are few entrepreneurs in this sector because people will have to pay more significant amounts for renovating their own homes. Then you say you are opposed. We are not opposing; we don’t want to place a heavy burden on citizens.'

The leader of the 'Lus' faction added that they are against the draft. The draft was put to vote and was approved with 42 votes in favor, 4 against, and 6 abstentions.