Wednesday, July 1 2020 18:59
David Stepanyan

MP: Redistribution of taxes aims to increase the financial  independence of communities

MP: Redistribution of taxes aims to increase the financial  independence of communities

ArmInfo.The planned increase in  property tax is a logical continuation of the lowering of the tax  burden regarding income tax that has occurred since last year. A  similar opinion was expressed by ArmInfo Chairman of the Standing  Commission on Economic Affairs of the "My Step" faction Babken  Tunyan.

"We did this in order to increase the degree of financial  independence of the communities. Income tax goes fully to the state  budget. Meanwhile, property tax is paid to the community budget.  Communities will have more funds at their disposal. Accordingly, they  will be able to solve their own problems on their own. We want to  exclude a situation in which a deputy will raise in parliament, for  example, the issue of repairing a kindergarten in his district, "he  stressed.

Such issues, according to Tunyan, will be decided by the communities  themselves. Including with the help of funds received from property  taxes. He also noted that communities can provide benefits to people  who are unable to pay property tax, cancel it, or defer it. This  provides for 10% of the revenue of community budgets. The most  important thing, in his opinion, is that all this will be done on the  spot, independently.  The parliamentarian emphasized the gradual  nature of the increase in the tax burden on property. In this light,  he noted that in the first 2-3 years it will pass almost  imperceptibly for citizens.

However, Tunyan attaches particular importance to the revision of the  cadastral value of real estate in the direction of increase, close to  market value. "Thanks to this very cadastral value, land with a  market value of 10 million was estimated at one million, and it was  alienated, and it was not clear to anyone at all for half a million.  State and communal property was squandered over the years. Revision  of the cadastral value allows us to streamline and prevent the sale  of state property for a penny. Moreover, from now on it will become  impossible to lease land for thousands of dollars, and to show 100  thousand drams, "the deputy emphasized.

Tunyan considers social justice to be another positive element of the  innovation. So, if real estate worth up to 10 million drams will be  taxed at 0.05%, then real estate worth more than 200 million will be  taxed at 1.5%. The use of such a progressive scale, he said, is  designed to ensure social justice.

Note that the new government made a conceptual decision to reduce  income taxes. Thus, the income tax in Armenia is calculated on a flat  scale and since 2020 has been 23% for all working citizens. Canceled  rates of 28% and 36% on high salaries. In until 2023, it will  gradually decline to 20%. Income tax from 2020 will also drop to 18%.  Instead, in 2021-26. on a progressive scale, the real estate tax will  gradually increase.

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