ArmInfo. The RA Ministry of Territorial Administration and Infrastructures proposes to allocate 2% of royalties paid to mining companies to impact communities.
Corresponding amendments to the law "On the budgetary system of the Republic of Armenia", as well as to the law "On compulsory medical insurance" were approved by the Cabinet of Ministers on August 12 at a government meeting.
As the Minister of Territorial Administration and Infrastructures of the Republic of Armenia Gnel Sanosyan explained, presenting the draft decision, "the redistribution of this small amount of money" aims to introduce in Armenia a culture widely used in international practice, which is based on the following idea: in those communities where, by virtue of geographic features and existing natural resources are mainly developed by mining, these funds are directed to the various needs of the communities of impact of the mines. According to him, when drafting the document, the legislator studied the similar experience of Serbia, Bulgaria, Albania, Ukraine and Kyrgyzstan.
As the head of the department pointed out, a number of subsoil users are still implementing various socio- economic programs in the communities, but on a voluntary basis. Because of this, some are not as targeted and do not make an effective contribution to the economic development of the community.
As a result of the innovation, as the minister said, about 902 million drams will be directed to the economic development of 23 impact communities. The government will invite neighboring communities to publish a separate report on the directions and programs of spending the funds received by them.
It should be noted that royalties are a payment paid to the state budget in order to compensate for the use of metallic minerals, as well as for the high profitability arising from the sale of these minerals and products obtained as a result of their processing. According to the report of the Extractive Industries Transparency Initiative (EITI) for 2019, if in 2016 the royalties paid by subsoil users amounted to 23.5 billion drams, then in 2019 the figure exceeded 37.5 billion drams.