Government approves 19th program as part of its effort to curb the adverse economic impact of COVID-19: Support will be provided to those starting a business from scratch
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A Cabinet meeting was held today, chaired by Prime Minister Nikol Pashinyan.
The Government approved the 19th COVID-19 response action, which seeks to help citizens and businesses overcome the pandemic’s adverse economic impact by implementing competitive business plans. The purpose is to support the startups by providing entrepreneurial knowledge and facilitating access to funding sources, which in turn will help develop innovative business plans.
75% of the funds needed under this program shall be made available as interest-free loans with a maturity of 8 years, and 25% as grants. The program shall be implemented through the ISC Foundation by providing guarantees for preferential lending.
Highlighting the decision, Nikol Pashinyan said: “Providing a corridor for creating a business from scratch is one of the most important points of My Step bloc’s electoral platform. The decision comes at the right time as we are facing a global crisis.”
The draft law “On Making Amendments and Addenda to the RA Tax Code” was approved. The purpose of the amendment is to move from the real estate tax calculation system based on cadastral values to the real estate tax system calculated on the basis of market values.
In this connection, Prime Minister Pashinyan noted: “This is one of our government’s most important reforms. In my opinion, a number of revolutionary changes will take place here. First, the notion of non-taxable real estate is eliminated as a matter of fact. Second, in this context, the concept of non-taxable threshold is to be eliminated. We say that if a person’s property is low, he should pay 100 drams a year. Perhaps this does not matter much from the fiscal perspective, but it implies a huge relationship in psychological and political terms when every citizen has the same relationship with the state. In general, yes, the property tax will increase, and mostly will increase on the property that we conventionally call castles, mansions, and so on. If we look at property taxes these big houses are paying today, we can say that they are symbolic in fact,” Nikol Pashinyan said, noting that this will play a key role in promoting an urban development culture in Armenia.
Emphasizing the need to introduce a 4-stage tax reform system, the Prime Minister said: “During this crisis period, the property tax of about 600,000 citizens will decrease in the first year, and will gradually increase from next year. In 2021, we will be in a crisis in terms of property taxes. But I am convinced that the pace of economic growth will be restored and that these increases will be commensurate with our situation.”
The Executive approved the government’s legislative initiative on the package of draft laws On Amending the RA Administrative Procedure Code and On Amending the RA Law on Administration and Guidelines for Administrative Proceedings.
The draft proposes, in addition to Article 83 of the Code of Administrative Procedure, to exclude from the effect of suspension the cases of disputing favorable administrative acts for the addressee of the administrative act or the favorable part of the accompanying administrative act.
As a result, the challenge of the administrative act addressed to another person by third parties will not automatically lead to the suspension of the administrative act.
According to Deputy Minister of Justice Rafik Grigoryan, the problem arose from the dispute over construction permits due to which construction work is suspended. About USD 400-500 million worth of construction work has been suspended so far.
“It turns out that the application of Article 83 of the Code in some cases leads to the abuse of their procedural rights by third parties who are not the addressees of the administrative act, and there is no way to protect the rights of the addressee of the administrative act. The latter cannot mediate to stop or take other actions,” the Deputy Prime Minister said, adding that in many cases, these lawsuits are unfounded and are often rejected.
Touching upon the draft package, Nikol Pashinyan noted that following heated discussions it was decided not to allow loopholes for suspending construction. In other words, no construction will be stopped automatically, but every single case will be discussed, and if the complaint is well-founded, then it will be suspended.
“Yes, this draft needs to be adopted soonest possible, because it comes as a strong incentive for capital construction, especially in times of a crisis,” the Premier said, noting that its adoption will create thousands of jobs.