Tuesday, January 31 2017 09:47
Alexandr Avanesov

Royalty implementation procedures for mining sector to be simplified in Armenia

Royalty implementation procedures for mining sector to be simplified in Armenia

ArmInfo. Starting with 2018, the royalty basic records applied in respect to the mining sectors enterprises in Amrnia, will bee much more closer to the volumes of benefits earned. According to the press office of the Government, this was stated based  on the  results of the meeting held Yesterday by Karen Karapetyan, the Prime Minister.

According to the source, the issue of royalty implementation in the mining sector, set forth by the tax regulations of the country,  was discussed. Noting the concerns of enterprises, and proceeding from the current conditions of the market, the Government took a decision to support business communities proposals. Particularly, a decision is taken to  set some softening provisions in the Tax Code, which is expected to become actual on January 1, 2018. Appropriate amendments are to be submitted to the National Assembly.

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.

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