Category: 2019

The Russian SISTEMA financial corporation, a major private investor, has re-nominated Armenian ex-President Robert Kocharyan to serve on its Board of Directors as Independent Director.

Kocharyan is an Independent Director and Chairman of the Nomination, Remuneration and Governance Committee of SISTEMA since 2009.

According to a news release by Kocharyan’s Facebook page, the composition of the Board of Directors will be approved on June 29 during an annual meeting of stakeholders.

Kocharyan, who was President of Armenia from 1998 to 2008, is currently under criminal prosecution in Armenia regarding the deadly 2008 post-election unrest in Yerevan. The case is currently suspended pending further proceedings from the Constitutional Court.

According to news posted on Facebook, the Prime Minister’s son, Ashot Pashinyan, who is serving in the army, has been transferred to the military unit of Sovetashen in Yerevan.

In an interview with Armdaily.am, Spokesperson of the Ministry of Defense of the Republic of Armenia Artsrun Hovhannisyan stated that soldiers are always transferred to different regions throughout their military service. “Our soldiers can be transferred to different locations for training courses and meetings. Not everything has to be interpreted.”

Hovhannisyan added that there is no military unit for permanent service in Sovetashen.

Statement by Armenia’s Ministry of Defense on transfer of PM’s son from military unit

The Ministry of Defense of the Republic of Armenia declares that all compulsory fixed-term military servicemen of the Armed Forces, including the son of Prime Minister Nikol Pashinyan, Ashot Pashinyan, are transferred to other military units, particularly training military units for the organizing of training on a regular basis during military service, along with their subdivisions and according to the previously approved curriculum.

“As a rule, all shifts are based on the staff list, are short-term and are restricted by the end of the specific action. The specified procedure refers to all military servicemen.

Once again, the Ministry of Defense urges everyone to refrain from spreading misinformation, especially imprecise information, or use overtly false news for domestic political purposes. Once again, the Ministry of Defense calls on verify any information related to the armed forces by contacting the relevant service of the Ministry of Defense.

Let us remind that according to news on Facebook, the son of the Prime Minister, Ashot Pashinyan, who is serving in the army, has been transferred from Artsakh to the military unit of Sovetashen in Yerevan.

In an interview with Armdaily.am, Spokesperson of the Ministry of Defense of the Republic of Armenia Artsrun Hovhannisyan stated that soldiers are always transferred to different regions throughout their military service. “Our soldiers can be transferred to different locations for training courses and meetings. Not everything has to be interpreted.”

The State Revenue Committee of Armenia has finally released the list of large taxpayers of the first quarter of this year. The fees of the organizations in the list have risen, but there are still oddities in terms of tax revenues.

Based on the list released by the State Revenue Committee, in the first quarter, 1,000 large taxpayers paid a total of AMD 212.2 billion in taxes (33.6 billion more than the previous year). There is almost 19% growth, and unquestionably, this is a high and even record-setting indicator.

Perhaps it is necessary to ask the State Revenue Committee how it managed to record such a high growth indicator when there is only 6.5% economic activity. If this is truly at the expense of the reduction of shadow economy, then indeed, this is commendable. But if the tax authorities achieved this through known and unknown methods, we can only express concern, especially since there are some grounds for this. Revenues with minus signs are more often seen in the releases of the State Revenue Committee recently, but this hadn’t been seen in the list of large taxpayers to this day.

For example, how can we understand that the profit tax of the Transgaz Company made up AMD -22.9 billion in the first quarter of the year? How is it that the City Company (belonging to former oligarch Samvel Aleksanyan who has close ties with the new authorities) paid AMD -986 million in income taxes in the first quarter? Does this mean Samvel Aleksanyan has to pay dues to the budget or the opposite?

Of course, this is not the only interesting episode related to this businessman in the list of large taxpayers.

Aleksanyan’s Alex Holding, which fulfilled its tax obligations of more than AMD 3.3 billion in the first quarter of last year, paid only AMD 132.4 million to the State Budget in the same period of this year. Basically, the company paid 25 times less. This might seem surprising at first sight, but this is the case.

This is the case because, in new Armenia, this businessman has decided to show that he is fulfilling his tax obligations in a new way, that is, under the name of not one, but several companies. It is a fact that Aleksanyan would constantly do business under the name of several organizations in the past as well, and it is clear that this is not an end in itself.

It seems as though there is a new company that will replace Alex Holding as well. Right after shift of power in Armenia, the businessman registered a new company (Alex & Holding), which is expanding its activities more and more.

Although it worked for a couple of months, it paid an AMD 2.8 billion tax last year, and the main part — at the end of the year. In the fourth quarter, the company’s taxes made up nearly AMD 2.2 billion.

The company started working actively in the beginning of this year as well. In the first quarter, Alex & Holding paid AMD 1 billion 332 million to the State Budget, of which more than AMD 1.2 billion was customs tax. This means the company imported products. As a matter of fact, out of the paid AMD 1.3 billion, only AMD 5.7 million was profit tax.

City Company, one of the other companies of the businessman, has paid AMD 1 billion 339 million in taxes. Since the taxes paid by the City supermarkets last year were included in the payments of Alex Holding, now it is impossible to say whether the taxes increased or decreased. The same goes for the other companies. Perhaps Alex Textile is an exception. Like last year, it was separate this year as well. It fulfilled a tax obligation of AMD 326 million, which is almost 2.4 times more than the previous year.

Since we talked about one of the well-known businessmen in the list of large taxpayers, let’s also touch upon the taxes paid by other well-known businessmen.

Recently, Ararat Cement Factory, which is the target of the government, paid AMD 374 million to the State Budget in the first quarter, and this has increased by AMD 124 million. Onira Club, another company owned by Gagik Tsarukyan, has paid AMD 1 billion 232 million in taxes, and this is AMD 53 million more than the previous year. The growth is particularly seen in the case of Multi-Leon and Multi Gas. In the first three months of the year, the first company paid more than AMD 259 million, the second — AMD 210 million. Multi-Leon’s taxes have increased by 2.9 times and Multi Gas company’s taxes have risen by 3.6 times.

The owners of Grand Holding have particularly advanced in terms of tax payments. In the first quarter of this year, Grand Tobacco paid more than AMD 12.8 billion compared to the AMD 8 billion last year. In other words, the company’s taxes increased by nearly 60%. Compared to the AMD 2 billion last year, International Masis Tabak paid AMD 3.9 billion to the budget, and this is almost two times more.

Why are these tobacco companies actively paying taxes? This is not clear. Let’s simply state the fact that, based on official data, in the first quarter of this year, Armenia has seen a 10% growth of tobacco production, while cigarette production has not grown.

One can notice a tendency of reduction of taxes paid by telecommunication companies in the list of large taxpayers, and this is rather sharply expressed in the case of certain companies.

Compared to the AMD 1.6 billion of the past year, in the first quarter of this year, MTS Armenia only paid AMD 199 million, meaning 8 times less. Veno Armenia transferred AMD 518 million to the budget, which is 2.5 times less than last year.

Ucom is the leader in terms of paid taxes and has paid more than AMD 1.9 billion, even though the company has paid fewer taxes. In the first quarter of last year, Ucom paid nearly AMD 2.5 billion in taxes.

In the spheres of import and realization of petrol and diesel fuel, unlike CPS Oil Corporation, the paid taxes of which have dropped, Flash Company’s transfers have increased by AMD 1.1 billion. Max Petrol has sharply advanced in the market — compared to AMD 292 million paid last year, this year, the company paid almost AMD 2.6 billion in taxes. Instead, Rosneft Armenia paid only AMD 199 million in taxes, which is less than last year’s taxes by AMD 155 million.

Like last year, Gazprom Armenia is on the top of the list of large taxpayers this year as well, even though the company has even reduced its taxes this year. The negative difference is higher in Transgaz’s case — AMD 1.7 billion compared to AMD 1.9 billion last year.

Another important fact: although the large taxpayers’ payments have increased by at least 19% this year, there has been almost no change in terms of profit tax. With respect to this type of tax, the payments of 1,000 taxpayers have made up AMD 22.9 billion compared to the AMD 22.4 billion of last year.

HAKOB KOCHARYAN

While the political authorities fail to ensure progress in the country, Nikol Pashinyan is now targeting the judiciary in order to distract the public’s attention from the accumulating social and economic problems. If you recall, there was a time when the Prime Minister said the fact that the Republican Party of Armenia constituted the majority of the National Assembly was the evil that was hindering economic growth and investments.

Although there was no initiative of the government that the Republican Party of Armenia didn’t support, this didn’t stop the government from dissolving the parliament and forming a new one.

As a result, today, Nikol Pashinyan’s team has absolute majority in parliament, but there are still no investments. As a matter of fact, there are fewer investments.

However, it has been quite a while since the parliamentary elections, and investors should have been ‘breaking the doors’ of the economy in the revolutionary Armenia, but this isn’t the case.

Question: Why aren’t there any investments, if the parliament was to blame for the absence of investments?

Even back then it was clear that this was simply a pretext to dissolve the parliament and justify the absence of an investment boom. As is known, even before getting elected Prime Minister, Nikol Pashinyan would promise to ‘inundate’ the Armenian economy with investments.

A year has passed, and now the Prime Minister should indicate any significant investment project that has been launched in Armenia following shift of power. This isn’t about the projects that had been launched during the term of the former government. However, even in this case, Nikol Pashinyan’s administration doesn’t have any occasion to take pride because even the previously launched projects were suspended after shift of power.

And after all this, it’s no surprise that the incumbent government is constantly seeking people to blame in order to justify the absence of investments. It’s not by chance that Nikol Pashinyan is recalling investments when there has been an attack on the judiciary. “We can’t tolerate this situation because this is a matter of stability and normal life in the country and national security. This is also a matter of future economic growth because an unreliable judiciary is simply a hindrance to the improvement of the state of investments in the country.”

Interestingly, aren’t Nikol Pashinyan’s actions a hindrance to investments? Are those actions increasing investors’ confidence in the Armenian economy and in Armenia, for that matter?

The fact is that there’s no capital flowing into the economy, and there won’t be capital flowing into the economy so long as the government creates tension and instability in the country through its actions.

What is also important is the fact that all this poses serious risks for the intensification of capital outflow. There is already quite a large number of financial resources flowing out of Armenia. The political authorities’ actions aren’t helping suspend those processes and are adding fuel to the fire.

Let us remind that, on average, citizens take nearly $100,000,000 out of Armenia through the banking system every month alone, and there’s no doubt that the recent processes will accelerate capital outflow.

The past year showed that strengthening of power is the priority for the political authorities, not the economy or social conditions. In these conditions, the fact that more and more investors are losing confidence in the Armenian economy isn’t strange at all.

Of course, investments aren’t the only problem. It was clear that investors weren’t going to rush to Armenia, but it’s not like this is the only thing that concerns the government.

A long time was not necessary to become convinced that whatever the Prime Minister is saying — leaping economic growth, economic revolution, investment boom and construction boom — is far from the reality. On the contrary, the Armenian economy has faced rather serious difficulties. There is almost no growth in the real sector, and the country can’t go very far with trade and service. The economy was being transformed more actively before shift of power than after shift of power. As a result, Armenia is gradually losing its positions in the global markets. Despite the declared policy on promoting exports and replacing imports with exports, to this day, the government hasn’t taken any visible step in those directions. It’s no surprise that the country’s foreign trade balance is worsening more and more.

It’s obvious that there’s no sense in talking about inclusive economic growth, which the government was talking so much about in the initial period following shift of power. People feel the impact of economic growth on their own incomes as much as they used to before shift of power.

It’s not by chance that the social conditions are not improving the way they should have been improving after the revolution, and there’s actually regression. No matter how much the Prime Minister declares that Armenia has created 50-51,000 new jobs following shift of power, unemployment will still be high, and people won’t be provided with jobs. People want to see real achievements, not theoretical achievements, but there are no real achievements.

In essence, the government’s current objective is to buy time. A couple of months ago, the government succeeded in doing this through dissolution of the National Assembly. Now it’s the judiciary’s turn. This might help keep the public occupied for a couple of more months, but it won’t change the economic situation and people’s lives. The time to demand real outcomes is approaching.

HAKOB KOCHARYAN