Tax reform in focus of Armenian government

PanARMENIAN.Net - The Armenian state revenue committee exceeded the quotas at the beginning of the year. Tax and customs proceeds increased by 14% in Jan. 2010, the committee’s press office said.

Social payments totaled AMD 6.78 billion, growing by 41.8% against last year’s index.

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Turkish-Armenian Business Development Council (TABDC) Co-Chairman Kaan Soyak said Tuesday that bilateral trade between Turkey and Armenia totaled USD 300 million, what is a success. Noting that TABDC forecast USD 150 million turnover, Mr. Soyak said that the World Bank predicted this figure as USD 200 million.

He said that trade between Armenia and Turkey was carried out via third countries like Georgia and Iran, so it was hard to calculate an exact figure.

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Agarak Copper Molybdenum Combine CJSC processed around 1.3 million tons of ore in the first half year of 2009, exceeding 2008 results (second half year) by 5%. As predicted, the volumes of ore mining and processing shall increase up to 3-3,5 million ton in the current year.

In 2009 the Company produced about 248 ton molybdenum concentrate and 13.500 ton copper concentrate. In February of 2009, because of the impact of global economic crisis the Company stopped its production activities and resumed its full scale operation starting from June 30. Since the end of 2008 ACMC’s operation became instable and starting from the month of October it started to accumulate losses, which were covered at the expense of investments of the shareholders. From the moment of stoppage of the Company 500 employees out of 900 continued renovation-recovery works and received full salaries, and 400 employees were on downtime vacation, and received 2/3 of their salaries. After the Company restarted it operation all the employees were reinstated.

Increase of the processing volumes last year was achieved due to the anti-crisis program, which was aimed at technical re-equipment, which resulted in increase of mining and production effectiveness. The program suggests a systematized approach, including capital investments for modernization of production, raising of qualification of junior staff, as well as changes of organizational structure of the Company.

In 2010 the Company is planning to increase mining and processing volumes up to 3-3,5 million ton, and reach the volumes of stripping works up to 2.2 million cubic meters. Growth shall be obtained due to technical re-equipment and, particularly due to modernization of the processing plant. In the result of such re-equipment ore processing capacity of the plant and the extraction level of useful matter will increase. Due to modernization of the plant the self-cost of the production will considerably reduce, because the costs for electric power, photo-reagents and other components will decrease.

For mining of 3,5 million tons of ore it is important to increase the number of mining machinery and vehicles. Increase of ore mining will bring about increase of stripping works.

Social issues are one of the most important problems for the management. Salaries are regularly paid and all social responsibilities are being carried out. City-formation policy is one of the Company’s priorities. It is actively cooperates with the Agarak city administration, and to the extent of its abilities participates in realization of social projects.

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The Armenian parliament debated amendments and changes to a number of laws: On Taxes, On Budget System and On Local Self-Government.

Presenting the bill, RA Deputy Minister of Territorial Administration Vache Terteryan said that sales tax, hotel tax, unfinished construction tax, tax on unprocessed agricultural land, value tax on parking of vehicles and other taxes are classified as local taxes. These taxes, except taxes on property and land, will be applied by communities at their discretion.

As a PanARMENIAN.Net correspondent reported from the National Assembly of Armenia, the revision of the list of local taxes caused a heated debate among MPs. In particular, representatives of Prosperous Armenia offered to organize additional hearings, involving all interested stakeholders to finalize this package of legislative initiatives.

Given the prevailing disagreement on this bill, the chairman of the National Assembly Hovik Abrahamyan suggested to postpone the vote for 15 days, during which changes in the above mentioned laws will be discussed and supplemented in the relevant committees of the National Assembly of Armenia.

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The Armenian National Assembly ratified Tuesday two international loan agreements between Armenia and Asian Development Bank over crediting the North-South Highway construction.

The total cost of the North-South Highway investment program reaches USD 1 billion, while the implementation period is estimated between 10 and 15 years. The investment program, funded by Asian Development Bank, involves construction of the Agarak-Kapan-Yerevan-Gyumri-Bavra highways and the road infrastructures. The construction of the corridor will improve the road link with Iran and Georgia, providing access to international destinations and markets. USD 120 million worth construction works were initially projected for 2010. The North-South transport corridor will promote economic growth in the country, generating annual USD 15-16 million revenues.

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1.7 per cent growth in consumer prices recorded in January in Armenia compared to December 2009, which is conditioned with seasonal price changes for some food products.

According to the official data of the Armenian National Statistical Service, in January 2010 compared with December 2009 prices for food products (including alcoholic beverages and tobacco) increased by 3.3 per cent. The prices for industrial goods and tariffs for services decreased by 0,1 per cent.

The consumer price index reached 107 per cent in January 2010 compared with the last January, the price index for food products (including alcoholic beverages and tobacco) amounted to 103,2 per cent, while price index for industrial goods reached 116 per cent and tariffs in the service industry made 109,9 per cent.

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The natural gas supplies to Armenia decreased by 19.7 per cent in 2009 amounting to 1809.3 million cubic meters against 2254.4 million cubic meters in 2008, press office of ArmRosgazprom reported.

The volume of gas sales decreased by 20.1 per cent reaching 1660.8 million cubic meters against 2079.0 million cubic meters in 2008. Gas consumption by the population reduced by 6.1 per cent amounting to 553.2 million cubic meters against 589.5 million cubic meters in 2008.

Gas consumption in the energy sector has significantly reduced amounting to 366.2 million cubic meters, 39.7 per cent less than in 2008.

The volume of gas consumption by the industry decreased amounting to 259.7 million cubic meters.

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Armenian PostBank will launch activities in spring 2010, RA Minister of Transport and Communication Gurgen Sargsyan said.

The bank will be a specialized structure functioning on the basis of Haypost offices and will offer financial and insuring services throughout Armenia.

$12 million will be invested in formation of the PostBank.

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USD 54,741,745 was bought at average price of AMD 375.94 /USD 1 and USD 56,179,602 was sold at average price of AMD 377.5 / USD 1 at Armenian foreign currency market on February 1 -5.

Deals amounting to USD 1.800.000 at average price of AMD 378.67 /USD 1 were struck at interbank market.

Deals amounting to USD 11.511.000 at average price AMD 377.43 /USD 1 were concluded at NASDAQ OMX Armenia.

On January 25-31 AMD loans granted by banks totaled 15.8 billion. USD loans totaled 19.3 million, Central Bank of Armenia press office reported.