“Our problems can only be solved through work, relying on our talent” - PM meets with Armenian specialists from Silicon Valley
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As part of his working visit to the United States, Armenian Prime Minister Nikol Pashinyan met with Armenian specialists working in the high-tech sector in Silicon Valley. More than 100 computer scientists attended the meeting.
To begin with, RA Minister of High-Tech Industry Hakob Arshakyan gave details of the Armenian IT sector’s performance indicators and development prospects, followed by Prime Minister Nikol Pashinyan’s remarks. The Premier stated in his speech:
I am happy to see you here today. We are completing our two-day visit to the state of California, and today we are leaving for New York to attend the United Nations General Assembly. Let me say that the visit to California was very impressive and very productive. Yesterday we had a big event - a rally - in Los Angeles. We had a number of meetings today in Silicon Valley, including this one.
What is it and what is our interest in Silicon Valley in particular? We have of course stated that the technology sector is a priority for our government, as well as tourism, industry, intensive or industrial agriculture. In general, this is linked to our vision of the future of Armenia because we believe that Armenia should be a country with a highly skilled workforce.
There is a lot of talk in Armenia about the formula of well-being. In the past, it was considered that to live well, one had to be an oligarch or be associated with an oligarch; at one point, there was corruption, etc.
Our main message is: Education is the formula of well-being. The formula for a successful life is an education that gives our citizens professional skills and, of course, educational reform is of paramount importance to us.
Recently, I presented to Stepanakert a draft strategy to be implemented by 2050. One of our strategic objectives is to make education a public and national practice, which means for us that the educational process in the Republic of Armenia should start at 3 years old, that in our country, all 3-year-olds should have access to nursery schools and that the educational process is never completed, that is to say even after graduating from university and have a successful career, the education process should not be completed.
Our next idea is the one I have already mentioned several times: every Armenian citizen, whether taxi driver or prime minister, should have at least a slightly higher level of knowledge than the day before.
In general, all of this is an educational process for me, because one of the most important goals of any official or business visit, as well as today's visit, is that we receive new information, acquire new knowledge and that this knowledge can be used in our future activities.
Of course, by saying that the technology sector is a priority for Armenia, it is very important that we do in practice to make it a reality and make Armenia attractive for this sector.
A very important change has been made to the Tax Code, which has certainly been the subject of much debate. I am pleased to announce that effective January 1, 2020, we will have a flat income tax of 23%. Each year, this tax will be reduced by 0.5% over the next four years. As a result, we will have a flat income tax of 20% in 4 or 5 years.
What does this have to do with the technology sector? We now have a three-stage income tax: wages up to 150,000 drams were taxed at 23%, salaries up to 2 million drams at 28% and wages over 2 million drams at 36% .
Of course, one of the largest taxpayers out of 23% is the information technology sector, since wages are 500,000 or more. This means we are reducing the income tax for this sector by 13% and 16% in the near future. We therefore hope that the environment will be more attractive for investors - IT jobs in Armenia.
Then you know that startup legislation has been changed in our country. According to the legislation, newly registered technology companies established in Armenia will be exempt from taxation until 2023 and will already pay a 10% income tax.
That is to say, in addition to the overall reduction in income tax, we also have a 13% discount, and we hope this will also make our country more attractive to startups.
In general, I can say the following: I think it is very important to note the current economic situation of our country. And I think the data shows that our economy is gaining momentum, as well as our forecast for economic growth this year, which continues to improve.
According to the latest data, The Central Bank has raised Armenia's economic growth forecast for 2019 from 6.9 to 7.2. In general, our goal is to achieve economic growth of at least 8 to 9% and move to double-digit economic growth, but of course, our messages from yesterday and today must be clear, especially for the Diaspora, and especially for the Armenians and I hope that will be the case.
Economically, there have been other changes. I would like to say that, for example, according to the previous IMF documents, if the tax-to-GDP ratio in Armenia increased every year, it would change by 0.3%, which the IMF experts considered to be a very positive development. But according to our calculations, it is only in 2019 that the tax-to-GDP ratio will increase by 1.3%, that is to say that we will exceed the IMF recommendation 3 to 4 times. This year, according to our calculations, the underground economy will be reduced by 3%.
In the first quarter, budget revenues increased by about 25%. These increases have allowed us to increase the salaries of military personnel, teachers, doctors, firefighters, foresters as of October 1 and pensions will increase by 10% from January 1, 2020.
Today, we are carrying out unprecedented road construction work in Armenia. Yesterday, I said at a rally that the Armenian road network was recently modernized thanks to Kirk Kerkorian's Lincy Foundation, and I am pleased to announce that we can, today, next year and in the years to come, do at least the same job through the state budget or, in general, as much as that of the Lincy Foundation.
Of course, all the other data were published: 65,000 new jobs were created in Armenia in the last year. Some of these jobs were created as a result of the decline of the underground economy and others are new jobs.
It is very important for us to encourage the citizens of the Republic of Armenia and to propose to them an economic formula according to which we can solve all our problems only by the work, by pressing on our talent, on the development of our talent , the discovery of this talent at an early stage and I am pleased that our figures show that Armenian citizens and Armenian society understand the political messages we send them.
This is very important because they believe that the real dialogue between the political authorities, the government and the citizens, as well as the dialogue that began between us at the time of the revolution, when we were on the revolutionary stage, and also by becoming a government, we continue this dialogue effectively.
I am confident that he will continue to give his results, the results that exist today. In the last five months, I presented the results in two papers entitled "100 facts about New Armenia". Therefore, as of today, I can say that we have 200 facts about the New Armenia, and whoever wants to see concretely, measurably and visibly what has changed in the aftermath of the revolution in Armenia can read and see these two documents. The goal of our government is to bring the Republic of Armenia about 100 changes every month, every quarter and every year, changes that we will all be proud of. Thank you.”
During the next question-and-answer session, Prime Minister Pashinyan answered a number of questions related to Armenia’s progress, the IT development vectors, the reforms in education and science, the Amoulsar mine project, etc.
At the end of the meeting, a memorandum of understanding was signed between the Armenian Ministry of High-Tech Industry and the Armenian General Benevolent Union. Prime Minister Pashinyan said it was the fourth document to be signed during his visit to the United States, which reflects the productive agenda of his visit.
Prime Minister Nikol Pashinyan’s working visit to the state of California is over. The Armenian Prime Minister leaves San Jose for New York and goes to the 74th session of the United Nations General Assembly, where he will deliver a speech.