Thursday, December 5 2019 12:20

ArmInfo.In Armenia, the terms of the law on financial equalization will be extended by two of the year.

The relevant amendments to the law were approved at a parliamentary  meeting on December 5 in the second and final reading.

Presenting the draft amendments, the Deputy Minister of Territorial  Administration and Infrastructures of the Republic of Armenia Vache  Terteryan said that from January 1, 2020 the deadlines for applying  the provisions of the law expire, which may lead to the fact that  about 253 communities in their budgets may be missed over 5 billion  drams. Most communities are not yet able to solve their problems with  their own incomes. For this reason, it is proposed to extend the  duration of the law until January 1, 2021. From 2022, the law will be  fully applied. From that time on, financial assistance will be  provided to the most vulnerable communities and border regions. The  deputy minister reminded that next year, an amount of 55.3 billion  drams is provided for subsidies to the country's communities. With  the annual growth of the subsidy fund by an average of 8-10 billion  drams, many problems of local self-government bodies will be able to  find their solution. The main task of the government, the deputy  minister noted, is to promote community service, and in this context,  deductions are set that satisfy the minimum needs of the communities,  local governments should raise the remaining funds from the income of  the communities. Vache Terteryan also reported on the upcoming reform  of the local government system, which, first of all, implies the  enlargement of about 400 communities, which will allow them to  successfully cope with challenges, ensure the implementation of the  revenue side of their budgets, and thereby reduce the dependence on  subsidized contributions.

It should be noted that the law is aimed at reducing the difference  between the financial capacities of municipalities for their  proportional development, as well as creating opportunities to carry  out costs in a minimum amount in all municipalities for local  authorities to fulfill their responsibilities. The principles of  financial equalization are mitigation of the inequality between the  financial capacities of municipalities, gratuitousness and  inappropriate grants provided to the municipalities from the state  budget, preservation of the freedom and autonomy of municipalities in  the exercise of their powers and the use of financial resources. The  law also determines the minimum total amount of subsidies provided  from the state budget, approval by individual municipalities of the  amount of subsidies allocated from the state budget.