ArmInfo.The standing committee on financial, credit and budgetary affairs, RA National Assembly, has approved draft amendments to the RA Law "On cashless settlements" and to related laws. The draft was prepared by the Central Bank of Armenia and stipulates restrictions on cash turnover from Jan. 1, 2022.
CB Vice-Chairman Vakhtang Abrahamyan stated that the amendments will restrict cash operations. Specifically, the document prohibits cash operations between legal entities. At present, such operations are inadvisable in the business-to-business relations between legal entities.
Restrictions will also apply to legal relations between business and individuals. An AMD 300,000 threshold will be set and applied to all transactions involving all individuals. The idea is that businesses will have no right to deny their customers non-cash payments for goods or services.
However, the draft stipulates a number of exceptions: non-cash payments from the state budget and from the budgets of local government bodies (scholarships, travel and entertainment expenses); non-cash payments of notary and attorney fees and salaries; non- cash payment of insurance, loans by banks and lending agencies. On the other hand, an AMD 20,000 threshold will be in effect for collateral loans, an AMD 500,000.
The CBA chairman reported growing daily non-cash transaction. Around 2.5mln plastic cards are in circulation in Armenia now. Also, 1,600 ATMs, over 1,000 POS-terminals and about 3,000 virtual POS- terminals are operating throughout Armenia. And it is only card transactions, save the other non-cash transaction mechanisms (e-wallets, QR-codes, etc.). Referring to the 2018 statistics, Abrahanyan reported a 50% annual increase in the volume of card transactions effected by individuals. Consumer interests are easier protected in the case of non-cash transactions. This new rules will also reduce the shadow.
However, Artsvik Minasyan, an MP of the Armenia opposition faction, disagrees with the officials' arguments. According to him, the new amendments will not only make people's everyday life harder, but will also contribute to informal economy. So many people will just start practicing barter. At its Sept. 30 meeting, Armenia's Cabinet approved the draft amendments to the RA Law "On cashless settlements" and to related laws. CB Chairman Martin Galstyan said that the main provisions had been for nearly a year discussed wit partners and the parties had found a consensus. The draft lists main fields of non-cash transactions: use and alienation of goods; work and services; loan agreements; salaries, any payments and transfers by government agencies; scholarships, payment for medical services; pensions benefits; financial transactions and notary fees. Specifically, from Jan. 2022, transactions involving use or alienation of goods to the amount of more than AMD 300,000, payment of salaries and a number of other transactions will be exclusively non-cash ones.
The draft amendments also set restrictions on cash-out transactions involving e-wallets. Specially, wallet transactions will only be served by means of bank accounts linked to the wallet. Thus, money transfers to e- wallets cannot be effected by means of, for instance, payment terminal. In his turn, Armenia's Premier Nikol Pashinyan called for considering the government's initiative in the context of corruption control. Non-cash transactions will allow authorities to track money flows, which, in turn, will ensure higher tax revenues and simplified tax administration.
