Government set to improve VAT refund mechanism: refunds to be made on monthly basis
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A Cabinet meeting was held today, chaired by Prime Minister Nikol Pashinyan.
Before discussing the agenda, the Prime Minister referred to the epidemiological situation, noting that a significant increase in the number of coronavirus infections was registered in the country after quite a long break: more than 700 new cases were detected per day. The Premier stressed the need to comply with the anti-epidemic rules so that there is no need to apply additional restrictions.
“I am hereby asking society, citizens to pay special attention to this problem, because the individual approach of each of us is essential in this matter. We have already developed an operational plan for boosting the healthcare sector’s capacity, and we will be guided by this plan. The challenge is that we do everything possible so that there is no need for maximum deployment, as it used to be before. And now the matter is up to us,” Nikol Pashinyan said.
Down to the agenda, the meeting approved a draft law On Amending the Tax Code of the Republic of Armenia, which seeks to generate taxpayers’ working capital by shrinking the VAT refund deadlines and improving the mechanism of refunds. In particular, the bill suggests refunding VAT by the end of each reporting month.
In this connection, Nikol Pashinyan stressed: “As of 2018, this system worked according to the logic of half a year. The domestic legislation provides that the amount of VAT is returned when companies export products. Before May 2018, refunds used to be made every 6 months. As of May 2018, we had about 100 billion drams in VAT refund arrears. We drastically reduced the amount owed to taxpayers in the first stage. The next change we made was to curb the term to a quarterly cycle. We announced that money had to be paid back monthly. And now we are going to institutionalize the monthly refunds.”
The Premier stressed the importance of honoring the commitments and the pledges made by the government in order to help increase the working capital of business entities: “In fact, we faced the problem of generating added value for many decades. We decided to find a solution, and now this process is being completed.”
The government approved a social investment program developed by GM Construction LLC, which concerns a site located at Shinararneri 23/9. A decision has been made to alienate the site to GM Construction LLC through direct sales. An apartment building with 18 aboveground and 2 underground floors will be built at this address. The building will have a total residential area of 11,556 square meters. As a result, those households currently domiciled at a building of 3rd degree emergency at Shinaraneri 23, will be provided with apartments and the issue of their resettlement will be resolved. The program beneficiaries can get a new apartment at the aforementioned building or money from the developer to buy housing of their choice in another place.
The government approved the application filed by Engineproject Com CJSC for inclusion in the register of beneficiaries of Ecos free economic zone (FEZ). The company plans to work in the field of high information technologies. About AMD 112.2 million-worth investment will be made under the program in 2021-2025. The program will help create 11 new jobs with an average monthly salary of about 560 thousand drams.