ArmInfo.The amount of royalties paid by mining companies is determined by the legislation of the country and is not based on contractual obligations. On December 5, on the sidelines of the meeting of the multilateral group that opened in Yerevan on the implementation of standards of the Extractive Industries Transparency Initiative (EITI) in the country, stated Chairman of the RA State Revenue Committee David Ananyan to correspondent of ArmInfo.
Answering a question about using offshore companies to conceal real incomes, the head of the SRC stressed that the legislation of the country used by companies does not interest the scheme. When the negotiated price becomes lower than the market, exchange prices begin to be applied to calculate the royalty base, and, as a result, there can be no problem with determining the size of royalties. "The country's legislation is not interested in the facts of registering companies in offshore companies in order to get more profit for companies, but they are interested in the exchange element of the settlement base," the head of the SRC stressed.
He also stated that the opinion that was formed in the public about the closed nature of the mining sector is incorrect. "I want to assure you that all market players, especially large ones, publish their information, including financial information, and this is their obligation," said David Ananyan, stating that the information provided often does not meet the requirements of the public. . In this context, the participation of Armenia in the EITI will ensure even greater transparency and accountability. He added that the purpose of the Initiative is to provide information on the entire chain of activities of companies in the mining industry.
This information should be open to all interested parties and groups, from mine development, ore mined to sales and profits. "This whole chain has a logical sequence, which is aimed at disclosing all the information", stressed David Ananyan.
To note, the size of royalties in Armenia is about 4% of revenue and 12.5% of profit before tax and interest expenses. Meanwhile, the profit tax in Armenia is 20%. As a result, mining companies pay taxes, amounting to 40 - 50% of profits, which is almost 15% more than taxes applicable to another type of business.
To recall, today, December 5, in Yerevan, chaired by the Acting First Deputy Prime Minister Ararat Mirzoyan, the meeting of the multilateral group on the implementation of EITI standards in the country began. On March 9, 2017, in the capital of Colombia, Bogota, Armenia's application for membership in the organization was approved. Thus, the republic became the 52nd country using the global EITI standard. The first national report should be prepared before the end of this year.