City Hall Fails to Pay Taxes, Causing Significant Damage to the State: David Khajakyan

The Yerevan City Hall was supposed to calculate and pay the value-added tax for the "Yerevan Waste Collection and Sanitation" municipal enterprise, which it has failed to do, thus evading its tax obligations. This was stated in an interview with NEWS.am by David Khajakyan, the leader of the "Lus" faction in the Yerevan Council of Elders.

"Essentially, discussions have been ongoing for about a year between the city hall and the State Revenue Committee (SRC), and the city hall attempted to employ a speculative maneuver by presenting the waste collection enterprise as an administrative entity. Meanwhile, the SRC has clarified that it is not exempt from VAT, and there is no such privilege established by law; therefore, the city hall is obliged to pay it. On the other hand, we must consider that for more than a year, the city hall has essentially failed to fulfill its tax obligations, causing significant harm to the state, and there is a corresponding article in the Criminal Code that prescribes punishment for failing to pay large taxes. In this case, we are talking about a municipal entity, but there is no legal difference because if a community leader who was not part of the political team of the current authorities acted in this way, a criminal case would have been initiated immediately. I am also confident that preventive measures would have been chosen, and it would have been presented as if this community leader had been robbing the soldier’s bread by failing to pay taxes to the state. The same is happening in the case of the city hall, but there is no difference at all," he said.

According to Khajakyan, if the city hall had paid these tax obligations like "Sanitek" did in the past, it would have become clear that we are paying more for waste collection than before. "And it would be clear that the city hall solved the problem not within the existing resources but increased the budget, and it is within this framework that it can provide better service. And it is evident that it is always possible to pay more and achieve better results," he said.

Earlier, 168.am reported that the SRC informed the city hall that it has unpaid tax obligations totaling 4,096,003 drams, of which 4,083,752 drams are fines, and 12,251 drams are penalties. Essentially, the city hall has also failed to fulfill another obligation by refusing to provide information regarding the VAT calculations. The notification states that the exemption from VAT established by paragraph 18 of part 2 of Article 64 of the Code is not applicable to the "Yerevan Waste Collection and Sanitation" enterprise (TIN 02697772). The waste collection enterprise has been operating for over a year, and, in fact, has avoided fulfilling its tax obligations during this entire time, thus causing significant harm to the state.