2019 June 26

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Anti-Corruption Daily

Anti-Corruption & News from Armenia - Jun/26/2019: Tax reform; Luxury property tax; How the elite paid less taxes.... State official busted by NSS.... Yerevan municipality proposals...... The future of Armenian soccer.... Aviation.... Foreign affairs.... whole bunch of news inside
by ar_david_hh

Disclaimer: All the accused are innocent until proven guilty by the court of law, even if they may sound as being guilty. Currency in Armenian Drams unless specified otherwise.

The NSS has busted a social security worker in Qyavar, in a 1.2mln bribery investigation. The suspect is the regional chief. He is accused of falsifying documents to release more aid under someone's name so he can embezzle some of it.


Yerevan mayor Hayk Marutyan says there is a known criminal act done by the municipality workers in 2006. A land was bought from the city for just 1mln, then sold for 247mln only a year later. The prosecutors refused to press charges in 2016, and now as well, because the statue of limitation is expired. The crime is "too old to prosecute".

The prosecutors told the mayor the city can get the land back. At the moment, city is negotiation with an investor to build something on that land, but this issue must be solved first.


Mayor Marutyan has proposed lowering the maximum speed limit from around 45mph to 30mph as a way to fight against increasing car accident deaths.

He instructed all zebra crossings to have reflective lighting. He noted that few people choose to use underground or above the ground passages, and instead they prefer to cross the street on the ground level.

He cited Project Zero Vision in other nations as a good way to solve the accident issue.


Yerevan municipality is fed up with the ugly looking and ever-increasing number of memorial placards on the public-facing sides of the buildings, and proposed creating a standard design for the placards.

https://armtimes.com/hy/article/164795 https://youtu.be/OG2RdHRO6BA?t=6

Yerevan municipality has taken back 5,100 square meter area from private individuals/firms who took it from the kindergartens after illegal deals in past. This is an ongoing process that begun last year. One of such lands was appropriated by former MP and oligarch Lfik Samo.

https://armenpress.am/arm/news/979913.html - - - http://panarmenian.net/m/arm/news/270386

Opposition LHK and BHK parties do not believe Kocharyan is a political prisoner, they say his charges are legal. They disagree that the new Constitutional Court Judge Vahe Grigoryan is the chief judge.

LHK suggested Grigoryan to file a complaint in the Administrative Court and annul the current chief judge's status, if he thinks the judge was appointed with violations.

https://armtimes.com/hy/article/164809 https://armtimes.com/hy/article/164806 https://armtimes.com/hy/article/164791


Another argument that the old Constitutional court "members" are not "judges", is that the new Constitution does not mention that they are supposed to continue their work as "judges", says a former judge.

On the other hand, the new Constitution does explicitly mention in another instance that the Control Chamber members (named under old system) automatically become the Audit Chamber members (named under new system). Because the Constitution doesn't have a similar clarification about the members-judges, it can be interpreted that the old members aren't judges, says a former judge, who thinks the Parliament should step-in and clarify the situation.


Parliament passed a bill to reform the tax system and establish a flat taxation beginning 2020 January 1st.

Co-author of the bill QP MP Papoyan criticized the previous governments for "purposely not updating the property prices in the castrate database since 2002", to purposely leave the old low prices, because their politicians were rich oligarchs with real estate ownership, so they created the system in a way to pay less property taxes.

Under the new law, the luxury property taxes will be significantly raised. Small property owners (e.g. $40k) won't see any significant rise in taxes. 20,000 property owners won't pay any taxes.

On the other hand, for example, luxury building owners in Monument will annually pay 27mln instead of 3mln. Why such a sharp rise? Because the official property price database was left un-updated in past, which meant a mansion owned by an oligarch could be reported in the government database as being priced 300mln, while in reality it was worth 3bln. The property tax was calculated based on the the low property value.

The property taxation will have a progressive tax brackets: property worth under 3mln won't be taxed, 3-30mln property will see a slight increase in taxes, the higher the cost the more % tax it pays. Even when the land property value database is updated, small property owners will continue to pay taxes as it was under the old system. The burden is placed mostly on luxury property, and at a smaller scale on the medium-valued property, says the MP.

The paychecks will be taxed less (from 36% to 20%). The MP doesn't agree that someone earning 350k is considered "rich". Business profit tax is lowered from 20% to 18% to encourage investments and entrepreneurship.


The Justice Ministry is inviting qualified NGOs to become a member of the upcoming anti-corruption policy board. https://armenpress.am/arm/news/979921.html

SOC had earlier found irregularities while auditing Yerevan Medical University's past works. They say the university has complied and fixed many of the problems. Earlier, the SOC and the university administration threw jabs at one another. Now it appears they came to an agreement.


Update: Yesterday, we learned that Yerevan university applications rose significantly compared to 2017 and 2018. The same trend is also seen in Gyumri, where each of the 3 major universities saw a 200-300% rise in applicants.


Education Ministry and the institutions that are under its control, will cooperate with staff.am job seeking platform to add available work positions into it.


In May of this year, the government passed a law to encourage a tech sector boom by helping smaller businesses.

Under the program, 100 tech firms have so far applied to receive favorable conditions such as tax waivers. 41 have received it so far, which will crate 220 jobs.

The law also helps startups, which in the initial period have to go through lots of financial difficulties. Profit tax is 0%, while income tax is 10% for these firms. Several startup founders are diasporans. The firms must have less than 30 workers to qualify.


Soccer federation chief Arthur Vanetsyan says they are still negotiating with private investors about building a new "National Stadium" that can host international games. The government won't pay for it. It'll be built outside of Yerevan ,near a highway, by the year 2025. It'll have at least 32k capacity and will meet UEFA's Category 4 standards (on par with big name stadiums).

By 2023, they plan to create a new sports center, to bring club-owned stadiums to at least Category 2 standard, to bring the number of Category 4 stadiums from 4 to 8.

They are also building 76 soccer pitches in provinces to help develop soccer across the country. Over $2mln will be spent. The arbiters are sent abroad for a retraining. They have invited some famous arbiters to visit and have their input.

Vanetsyan has asked club owners to get together and form a "professional league" like seen in other countries. This will reduce the soccer federation's role in the club tournament organization, and will allow clubs to solve their problems. This will also free up financial resources for soccer federation so it can focus more on the Armenian national team and the development of soccer among children.

There will be 12 clubs in the club league, instead of the current 9-10. Partially because the number of stadiums will increase.

https://armtimes.com/hy/article/164826 --- https://www.armtimes.com/hy/article/164839 --- https://www.armtimes.com/hy/article/164842

There are 250 million known narcotic users in the world. 6,900 of them are in Armenia. That's up 6% from last year. Around 4k are cannabis users. 2k use opioids. 5 people prefer koko.


Civil Aviation board met with reps of several Russian and one Armenian airline companies. They discussed the topic around the ban of Russia-Georgia flights.

They discussed increasing the flights between Georgia and Armenia, and to use the latter as a transit country. Currently, 11 Russian airlines provide flights to Armenia.

An airlines company agreed to provide flights between Gyumri - Moscow, and Gyumri - Batumi (Georgia).

Russian Aeroflot agreed to swap Georgia-Russia tickets with Armenia-Russia. They will increase flights to and from Armenia.

Russian Ural airlines, which serves 60% of the flights between Georgia-Russia, said they'll transport their passengers from Georgia to Armenia via bus, then fly them to Russia.

Ural airlines agreed to use Gyumri airport for flights as well, and to increase travel frequency between Yerevan-St. Petersburg.

Pobeda airlines wants to use the Armenia-Georgia-Russia railways to substitute for some of the flights.

Sibir airlines said they'll increase flight frequency.



"Armenia airlines" was given a permission by Russia to make direct flights between Yerevan and Moscow. There will be 2 daily flights. They will be scheduled to be convenient for those arriving from Georgia who are headed to Russia. The wait time in Armenia will be only 50 minutes.


Several famous Armenian-Russian media personalities released a video encouraging tourism to Armenia.


-- https://www.armtimes.com/hy/article/164864

Istanbul's newly elect mayor Imamoglu, from the secular CHP party, remembered a story about his Armenian architect friend Zakaria Mildanoglu. About how the latter convinced Imamoglu that nature isn't the only beautiful place and that the "rocks" in a city can also be beautiful.


US House's foreign affairs committee member Bred Sherman has urged the Congress not to sell any weapons to Azerbaijan, that could be used to shoot down a civilian jet. He cited Azerbaijan's constant threats of shooting down civilian jets in Stepanakert, Artsakh airport as the reason. The House will hear it after the July 4th holiday.


Armenian PACE delegates countered the Azeri delegation's propaganda during PACE's meetings.

Azeri delegation organized two hearing, regarding the question of internally displaced people, and the topic of 2 Azeri murderer infiltrators who are in Artsakh prison (the one that video taped his crimes and later killed an Armenian teenage boy).

During the refugee hearing, instead of discussing what they have been doing for them, the Azeri delegate turned it unto an anti-Armenian propaganda session. The Armenian delegation gave a speech and countered the Azeri report, pointing out some misinformation. The Armenian delegates also complained that PACE didn't properly organize the presence of Armenian and Artsakh delegates ahead of time, because the nature of the session was political, thus both sides needed a fair representation.

One of the Azeri infiltrators' sons was present during the discussion. The Azeri delegation was trying to create an emotional environment. The Armenian delegate reminded PACE that the case is of a criminal nature and should not be presented as a humanitarian issue. She reminded that that the infiltrators killed 2 Armenians, including one 17 year old boy. One more civilian was wounded.

Armenian delegates said the murderers should not be glorified, and new "Safarovs" should be prevented from happening. They told Azeri delegation to go look inside their own prisons filled with political prisoners if they want to see human rights violations.


President Sarkissian is still in STARMUS tech and science conference in Zurich. Gave a speech. Met the director of Canary Islands astronomy institute and offered a cooperation with Byurakan Observatory. He offered to host the next STARMUS conference in Armenia.


This month the Armenian humanitarian group in Syria cleared 1600sq/m land from mines, and provided medical aid to hundreds of adults and children.







Link to original report: https://www.reddit.com/r/armenia/comments/c5va3b/anticorruption_news_from_armenia_jun262019_tax/

2018 Daily Armenia Reports








2019 Daily Armenia Reports