Government to Compensate 4.2 Billion Dram Fine Accumulated by Shangri La Casino

The government decided in its meeting today, July 7, to compensate the 4.2 billion dram fine accumulated by the Shangri La Casino, owned by Gagik Tsarukyan, from the state budget.

According to Deputy Minister of Finance Arman Poghosyan, the economic activities of certain types, including casino operations, were temporarily banned throughout the territory of Armenia under the decree No. 13 issued by the Prime Minister on March 23, 2020, due to the COVID-19 pandemic.

He noted that under Article 32 of the Law on State Duties, one quarter of the annual tax amount is paid by the casino to the state budget on a quarterly basis, amounting to 1.3 billion drams.

Poghosyan explained that by order No. 350-A of the Minister of Finance dated November 20, 2020, the license for organizing casino gaming was declared void due to the company 'Onira Club' failing to pay the annual state duty, which constituted a second violation leading to the suspension of the license.

Based on point 2 of part 1 of Article 83 of the Administrative Procedure Code, the mentioned administrative act was deemed subject to immediate execution by the order of the Minister of Finance. The administrative court of Armenia accepted the claim from the company as of February 15, 2021, and the decision to invalidate the license issued on January 1, 2014, by the Ministry of Finance was annulled, while the Supreme Court rejected the appeal from the Ministry of Finance.

The Deputy Minister emphasized that the aim of the decision is to mitigate the economic consequences of the restrictions imposed throughout the territory of Armenia in 2020 by the decree of the Prime Minister, specifically for 'Onira Club' LLC.

The justification of the draft states: 'This decision proposes to increase the expenditures by 4.2 billion drams under the program 1224, 11002 “Provision of support for the payment of previous year’s tax liabilities,” which will settle the obligations incurred concerning the calculated state duty and penalties applied under part 7 of Article 408 of the Tax Code of Armenia for gambling and casino operations.'

Prime Minister Nikol Pashinyan also noted that the 'Onira Club' LLC belongs to 'Multigroup', and by this decision, the company is given the opportunity to restart its operations without fines from October of this year so that the budget does not lose 5 billion drams annually. He remarked that the casino did not pay the tax as it has not operated, and if the court process continues, the state would only suffer from it.

Pashinyan also mentioned that the government welcomed Gagik Tsarukyan's idea of constructing a statue of Christ on Mount Hatis, which would significantly boost tourism.