ArmInfo. Souren Krayan, the Minister of Economic Development and Investments, on Febuary 3 discussed upcoming reforms in the mining sector. According to the information of the Ministry press office, following Tigran Khachatryan, the Deputy Minister of Economy, Armenian government, meeting the wishes of the mining sector companies, has submitted to National Assembly a draft package on tax discount modifications to make the tax load easier.
According to Khachatryan, in the result of this arrangement , in the case the indirect method of evaluation is applied to the royalty tax base, it is proposed to implement the 80% limit instead of actual 90%/ It is expected also, that starting with 2017, the base used for the calculation royalty will stand essentially closer to the limits of benefits obtained.
According to Narek Abrahamyan, First Deputy director of Zangezour Copper Plant, t this is the first time that the Government responds to the concerns expressed by companies, and that will lead to essential reforms in the sector. In his turn, David Yedigaryan, the Financial Director of Agarak Copper Plant, also expects for new investments in the sector based on the results of regulatory changes. Earlier, the information shared with ArmInfo by Lydian Armenia operating the Amulsar mine, stated that 50-65% of all the cost of global mining industry is formed with operational and capital costs, and the major part of those is being spent in the country of residence. Taxes and other compulsory charges form up to 15-20%. Hence, a company, and, particularly, the company having startup projects, as it is in the case of Amulsar, cannot get the vast majority of financial benefits. Besides, there is an additional tax in the contry regarding the mining sector. The volume of this tax forms about 4% of net profit, and 12,5% of the pre-tax profit and prior to interests payouts. Meanwhile, the profit tax in Armenia forms 205> As a result, mining companies pay taxes which form 40-50%, which is almost twice bigger than those for other kinds of business. According to preliminary calculations, within keeping the current tax rates total tax payments for whole the period of Amulsar mine operatuion (which is 11 years) will form about USD 488 mln.
