ArmInfo. Discussions and meetings with donors and recipients have identified several issues that hinder the development of donation and charitable institutions in Armenia, as stated by RA Minister of Economy Gevork Papoyan during a meeting of the RA National Assembly Committee on Economic Affairs on September 24.
He was presenting amendments to the RA Tax Code in the first reading. According to the Minister, Article 123 of the Tax Code allows libraries, museums, public schools, nursing homes, orphanages, medical institutions, and non-profit organizations to deduct the cost of work performed and/or services rendered to them, but not more than 0.25% of the gross income for the tax year, for the purpose of determining the tax base for corporate income tax. This provision is intended to facilitate donations.
Surveys show that donations play a significant role for Armenian higher education institutions. They contribute to replenishing of their property base, renovating and equipping classrooms, creating laboratories, accessing high-quality digital programs, and acquiring other assets aimed at improving the quality of education.
The Minister emphasized that many philanthropists have expressed their willingness to provide more substantial charitable assistance, particularly to educational and scientific institutions. A new legislative initiative proposes allowing taxpayers paying income tax to increase deductions for gifts and charitable donations by reducing their income tax, but not more than 2.5% of gross income for the tax year. This authorization will apply to assistance provided to public schools, universities, and vocational schools. The same principle will apply to the Military Support Fund. International experience, including that of Georgia, the United States, and Finland, was taken into account in the development of the document.
