Thursday, June 13 2019 19:53

ArmInfo.Center for the Development of Economic Initiatives (CEDI - Center for Economic Development Initiatives) opposes the adoption of the draft law on  increasing the property tax in a format in which the document was  submitted to the government.

In order to discuss the draft law submitted by the RA State Real Estate Cadastre Committee, on June 13 CEDI initiated discussions, to which invited persons involved in the draft law, including independent experts, representatives of the  State Real Estate Cadastre Committee, the National Assembly of the  RA, and the Ministry of Finance.

Director of the Center Marina Arakelyan noted that the government is  currently discussing a new property tax bill, according to which  property tax will be calculated at the market price of real estate,  rather than the cost established by the cadastre, which, according to  the expert, will affect a substantial increase in the tax on  residential, industrial, public property values, as well as land.

According to her, the draft law clearly states that the adoption of  the project will increase the budget revenues in the state and local  governments. <That is, all those who have real estate in RA will pay  a high real estate tax. This bill is also dangerous because it  extends to the region. And this is the case when we know that the  average level of poverty in the country is about 25%, and in the  Shirak region it reaches 45%>,- said M. Arakelyan, reminding that the  government plans to reduce the level of poverty to a minimum until  2023. In addition, she noted that the adoption of a bill could have  extremely negative consequences for socially vulnerable groups. In  addition, in the opinion of M. Arakelyan, the increase in property  tax will negatively affect the development of the tourism industry,  and a chain reaction will affect the increase in services in the  sphere of public catering, service, etc.

In turn, Deputy Head of the State Real Estate Cadastre Committee  Araik Sahakyan noted that property taxation should be carried out on  the basis of prices more close to the real value of real estate. In  this vein, he noted that the State Committee carried out a  corresponding study with the involvement of independent appraisers,  which covered 51 thousand real estate objects. <The tax code  indicates that property should be taxed on a unified basis. We  carried out the work, developed a bill, according to which the  maximum threshold for land tax was set at 330 thousand drams per 1  sq. M, and 700 thousand drams per 1 sq. M on buildings-structures,  "said A. Sahakyan. Noting that the prices indicated relate to the  Small Center property.

He noted that most likely the increase in property tax will not apply  to low-value property.  "Expensive real estate was previously not  taxed properly," he said.

Continuing the words of A. Sahakyan, member of the NA Standing  Committee oneconomic issues Gevorg Papoyan noted that property tax  has not risen in Armenia since 2002, explaining that who would have  to make such decisions, had a lot real estate, and being directly or  indirectly connected with the NA of the Republic of Armenia is not  made such amendments guided by their own interests. "Today we should  tax labor and wages as little as possible, but at the same time raise  taxes on real estate, wealth and property," said G. Papoyan.