A Cabinet meeting was held today, chaired by Acting Prime Minister Nikol Pashinyan. Prior to discussing the agenda, the Acting Premier referred to the summarized results of the snap parliamentary elections, the tense military-political situation in the region following Azerbaijan’s provocative actions and maximalist aspirations, the dynamics of the growth of jobs, the difference between the income tax collection indicators for the first 6 months and the epidemiological situation in Armenia. Below is the transcript of the first part of the Cabinet meeting:

Acting Prime Minister Nikol Pashinyan: Before speaking about today’s agenda, I would like to emphasize that with its July 17 ruling, the Constitutional Court of Armenia upheld the results of the June 20, 2021 early parliamentary elections as reflected in Decision N 184-A of the Central Electoral Commission. Once again it was stated that the snap elections were held in accordance with democratic standards and the final results expressed the will of the people of the Republic of Armenia.

Let me remind you that according to international observers, the snap parliamentary elections were competitive, and the basic rights and freedoms were observed; the polls were free, the participants were provided equal opportunities during the electoral campaign, the principle of equal coverage was observed, and the elections complied with the generally accepted democratic principles.

Thus, the 8th National Assembly will consist of 107 deputies: the Civil Contract party will hold 71 mandates, “Armenia” bloc - 29 mandates, and the “I have the Honor” bloc - 7 mandates.

Dear Colleagues,
Dear Compatriots,

Congratulations to all of us for holding free and competitive parliamentary elections in a crisis situation. Congratulations to “Armenia” block and the “I have the Honor” block on getting seats in parliament.

I want to emphasize that for the first time in the history of Armenia, elections became a means of overcoming the domestic political crisis, whereas formerly we used to face political crises following elections.

Dear Colleagues,

The Constitutional Court of the Republic of Armenia made a number of important emphases in its decision on the election results. Of these, I would now like to highlight the part that deals with incitement to hatred. I quote an excerpt from the Constitutional Court’s decision: “Taking into account the constitutional status of the Prime Minister and the scope of powers in Armenia’s constitutional democracy, as well as the influence of the political majority in the system of public authorities, the Constitutional Court stresses the need for them to take practical steps to rule out any form of hate speech, insults or defamations, including during the electoral campaign.

Conducted by political forces involved in elections, the electoral campaign is supposed to help them get as many votes as possible and strengthen voter confidence. A key role in this process should be played by informing voters about the political forces’ electoral platform concerning the economic, social, defense and other fields through substantiated discussions, without excluding sharp critical statements during the election campaign, which, however, should not be accompanied by hatred, violence, insults or degrading remarks. At the same time, all political forces participating in the elections should play a significant role in ensuring the effectiveness of the specified process.” End of quote.

I wish to draw your attention to the fact that this assessment concerns not only the electoral campaign, but also the political discourse and behavior, in general. As the head of the proportional list of the winning political party, and as the prime minister elected by the people, I would like to say the following: the Civil Contract Party is committed to doing constructive work in the National Assembly and outside the National Assembly with respect for the country’s security, prosperity and development.

We are firmly determined to comply with the obligations assumed before the voters and are prepared to work with both parliamentary and extra-parliamentary forces without resorting to hate speech, language of hostility, insults or defamatory remarks.

As you may know, interaction with non-parliamentary forces has been institutionalized in these days. The relations with parliamentary forces are institutionalized by the laws and the Constitution of the Republic of Armenia. I hereby declare that the government and the parliamentary majority take up the challenge voiced by the Constitutional Court and will take all necessary political, legislative and legal measures to prevent the language of hostility, insults and humiliation of dignity in Armenia.

Dear Colleagues,

Unfortunately, the military and political situation remains tense in our region. Azerbaijan’s provocative steps and maximalist aspirations trigger new threats for Armenia, Artsakh, and the region, as a whole. In this context, I would like first of all to stress the key role played by the Russian Federation in ensuring stability and security in our region. The united grouping of troops of the Armed Forces of the Republic of Armenia and the Russian Federation and the Russian peacekeeping mission in Nagorno-Karabakh are the cornerstone in terms of ensuring peace and stability in the region. At the same time, I still believe that Azerbaijan seeks to undermine the implementation of tripartite statements of November 9 and January 11, in particular, the opening of regional communications and unlocking Armenia.

Armenia considers the unblocking of regional communications of primary importance, and we are prepared to continue working in this direction with the hope of achieving specific results. We expect Azerbaijan to honor its written commitment to return the prisoners of war, hostages and other detained persons.

It is unacceptable that Azerbaijan has been violating the state border of the Republic of Armenia in the Sotk-Khoznavar segment since 12 May of this year. We reiterate our proposal to resolve the crisis in the Sotk-Khoznavar segment through a mirror withdrawal of troops on both sides, deployment of Russian border guards and international observers, which can provide the necessary conditions for the demarcation of the Armenian-Azerbaijani border. We also reaffirm our readiness to resume peace talks.

Regional peace and stability do not have alternatives, and the Government of the Republic of Armenia is committed to the fulfillment of the mandate received from the people of the Republic of Armenia to open up an era of peaceful development for Armenia, Artsakh and the region as a whole.

Before moving to the issues on the agenda, I would like to touch on another topic. I mean the dynamics of jobs in Armenia. For several months now we have stated that the number of jobs is growing in our country. And I am pleased to report that we boasted an absolute record in the number of registered jobs in June. Mr. Hovhannisyan, please give us the latest data.

State Revenue Committee Chairman Edward Hovhannisyan: Thank you. Yes, Mr. Prime Minister, the recent months’ trend of periodic job growth continued during June. The number of registered paid jobs was about 643,000. This is an unprecedented figure: it is just 34,000 more than in 2020, 38,000 more than in 2019, and 80,000 more than in 2018.

It is noteworthy that the amount of income tax paid for these workplaces reached an unprecedented figure - about 139 billion drams – in June. To illustrate the difference between the recent years’ indicators, I can state that it is 19 billion drams more than 2020, for 26 billion drams more than 2019, and 40 billion drams more than the 2018 indicator. A high index is also recorded according to the income tax paid. For the first time, the size of the income tax reached about 30 billion drams. This indicator is also significantly different from the indicator for the same period in previous years.

In June 2021, a high indicator was also registered in terms of average salary as compared to the same month last year. In particular, the average monthly salary was 216 thousand drams, compared to 198 thousand drams in 2020, 187 thousand drams in 2019 and 177 thousand drams in 2018. Also, the highest rate of total jobs, paid or unpaid, was registered for the first time in the period under review. We had 695 thousand jobs. That is all. Thank you.

Acting Prime Minister Nikol Pashinyan: Thank you, Mr. Hovhannisyan.

Dear colleagues, I wish to draw your attention to the difference in the income tax collection indicators for the first 6 months. In the first 6 months of this year, we collected 28,500 million more drams in income taxes than in 2018 amid a significantly reduced income tax rate. I want to say that this is a particular case where the government’s idea has come to fruition. Because when we introduced the proportional income tax rate, we said that one of our goals was to step up the rate of increase income tax collection, and that goal has been achieved in the medium term.

But I would like to touch on another key issue. We know that, unfortunately, some of our reforms have been abused. You know that we introduced the micro-business system, which was aimed at supporting smaller companies so that they could become larger and more successful. Let me remind you that such status is granted to entities with an annual turnover of up to 24 million drams. By the way, we have established a differentiated income tax rate for this segment, again to support small businesses.

Why do we support small businesses? So that they could boast excess revenue and pay more taxes. But unfortunately, what phenomenon can we see? We see, for example, that companies with an annual turnover of 100 million drams are divided into 4 parts to use or, rather, abuse these legislative changes, becoming 4 micro-businesses, which goes beyond the logic of our reform. We have talked about this topic before. We have to solve this problem in order to prevent tax abuses. We have drafted a bill, and we will move in that direction. Because, I repeat, the goal of our changes is not for large businesses to split up to become a lot of small businesses and pay less tax. Rather, our goal is to support small businesses so that they could grow and pay more taxes. So let us agree that we must take effective measures to prevent tax evasion. Of course, we need an in-depth and all-inclusive discussion, so that we could be more targeted when streamlining economic relationships and formulated our goals correctly to achieve the proposed objectives. This is the second topic.

Acting Deputy Prime Minister Mher Grigoryan: Mr. Prime Minister, I would like to add something in connection with the second point you mentioned, the tax reforms, and to record that this is also on our agenda and we need to make adjustments.

In addition to the fragmentation of micro-businesses, we have seen another phenomenon, although we have seen this risk during the reforms, where real jobs are virtually or formally replaced by self-employed or micro-businesses, which is also unacceptable. So that is not what we wanted, and that is also an issue that we should address, and I think we will make some badly needed adjustments to make sure that there are no such abuses.

Acting Prime Minister Nikol Pashinyan: It must be stated that we have spheres that are in the field of tax benefits, and this is not always justified. We must clearly delimit, separate the priority directions from the secondary ones and implement specific tax reforms, because the ambitious reform program and the transformation that we want to implement in Armenia calls for serious financial injections.

Of course, the support of our international partners is very important in this regard. I would like to mention in particular the decision of the European Union to provide a support package to Armenia in the amount of 2.6 billion euros. Nevertheless, we should also be able to conduct fair and well-balanced fiscal policies from internal sources so that the state could generate the amount of tax revenues that would be logically and legally acceptable. Of course, we must continue to work in this direction.

The third topic I want to affect is the situation with a new type coronavirus. For the second day in a row, we have had more than 200 new cases per day. Mrs. Nanushyan, please present the dynamics of the last days. What is going on?

First Deputy Healthcare Minister Lena Nanushyan: Thank you. Mr. Prime Minister, distinguished colleagues, I would like to note that in recent days there has been a definite upward trend with a very low rate. However, if last week we were registering up to 200, maximum 200 cases per day, this week we have already surpassed 200, yesterday we had 220 new cases, today we have already registered 225 cases.

According to our forecasts, this trend will continue in the coming days. I also wanted to provide some figures about how many people are getting treatment. We have 3790 people under treatment, 606 of which - in hospitals. 282 patients are in serious, and 48 – in extremely serious condition.

Mr. Prime Minister, I am just citing the figures to once again call the population to vigilance, because the COVID-19 pandemic is still continuing. Yesterday we had 2 deaths.

I would also like to point out that the pandemic is intense in our region. The growth continues in some European countries as well. However, I should note that the nations with higher rates of vaccinated citizens boast smaller numbers of hospitalizations, and casualties are reported among unvaccinated citizens.

Since the Armenian government has made vaccination free for all persons over 18 years, I urge our citizens to take advantage of this opportunity and use the window to defy the new tide that we can observe nowadays. Thank you.

Acting Prime Minister Nikol Pashinyan: Thank you, Mrs. Nanushyan. First, let us state an important fact: yesterday I listened to the head of the World Health Organization and, in fact, it is clear that the coronavirus will accompany us for a very long time, because one tide passes, another one comes, mutations happen and so on. So to expect that one day the coronavirus will just disappear is not realistic.

But there are good news. At least according to data currently available, the existing vaccines are effective against all strains. If we translate your call for vigilance, it will mean two things: first, we must intensively continue to work on vaccination. Secondly, we must maintain the practice of wearing masks in closed rooms.

I want to remind you that since May 2020, we have had this policy that we have to learn to live with the coronavirus. We have made such a decision, and hopefully we can put that decision into practice, that we will not go to lockdown at all, but we have to do it together.

What daily vaccination dynamics do we have right now?

First Deputy Healthcare Minister Lena Nanushyan: More than 5 thousand per day, Mr. Prime Minister.

Acting Prime Minister Nikol Pashinyan: Including foreigners?

First Deputy Healthcare Minister Lena Nanushyan: A very small amount, only in mobile brigades and in limited quantities.

Acting Prime Minister Nikol Pashinyan: No. I would like the daily statistics to separate the number of Armenian citizens and foreigners. We agreed that we must maintain the daily vaccination rate at the level of at least 5,000 Armenian citizens.

I would like to call our attention to what each of us has to do in this respect. We must actively promote this process among state bodies; we must constantly raise awareness of this issue in our public speeches. Since, COVID-19 will actually trigger new tides and new strains, and there are two ways to protect against it: wearing a face mask and vaccination. Therefore, we must also make an effort to ensure that the rule of wearing masks indoors is respected as much as possible.

We call on our compatriots to possibly observe this rule, so that we do not have to resort to administrative sanctions in this area. But if statistics force us to do so – I mean the application of stricter rules for wearing masks - we will have to go for it. I repeat once again that vaccination is the most effective way to defy the disease. We have a fairly good stock of vaccines at this point of time; we continue negotiations to achieve the goals we need. In this regard, all government departments should help the Ministry of Healthcare to conduct the vaccination campaign at the right pace and in the right amount. Thank you.