In Armenia, income tax deduction threshold for charitable donations  to be raised to 2.5%

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.