The discussion of the tax package that created controversy in parliament last week has been delayed by two weeks. The complex initiative consists of proposed amendments to laws on “Taxes”, “Budget System” and “Local Government” which the government proposes will result in better tax administration.

Under the proposed changes local government bodies are empowered to set additional types of tax, such as for hotel, sale, incomplete construction cite, uncultivated arable land, improper use of land suitable for construction purposes, taxes from facilities considered communal property.

Artsvik Minasyan, a member of the Armenian Revolutionary Federation’s (Dashnaktsutyun) parliamentary faction, says that the introduction of these types of taxes is not grounded economically, socially, nor politically or legally.

“There is no estimation that would substantiate the expedience and economic impact of the introduction of these types of local taxes. But socially it becomes an additional burden in [economic] crisis conditions,” said the opposition deputy.

Ruling Republican Party (RPA) representative Vardan Ayvazyan, meanwhile, thinks that the proposed changes, on the contrary, create financial opportunities for local government bodies and offer tax collection mechanisms.

“The tax package will contribute to the strengthening of local government bodies. In the event of relevant legislative changes the collection of two major taxes, the land tax and property tax, by local authorities becomes mandatory,” he says, adding that the state will no longer allocate money to local government body for the collection of land and property taxes.

Another senior Dashnaktsutyun lawmaker Vahan Hovhannisyan says that while his faction supports the strengthening of local government bodies, they oppose the mechanisms that will be applied.

“We have all witnessed how local leaders use their freedom – heads of poor villages buy expensive SUVs, do expensive repairs in their offices, forgetting about the needs of the village. You’ve given them this freedom and do not want to limit it. And now you want to add a larger budget to this ‘freedom’,” says Hovhannisyan, criticizing the measure supported by the governing coalition members.

MP Vardan Khachatryan also views this government initiative as a “tightening the screws” and raises the following question: “Is it allowed to pass a law that adds the tax burden in crisis conditions?”

RPA faction member Rafik Grigoryan says that leaders of communities are empowered to set taxes by the Constitution and by these changes these delegated powers only become mandatory.

And Prosperous Armenia party MP Vardan Bostanjyan thinks that for raising the efficiency of activities the state should introduce not separate types of taxes, but make relevant changes in corresponding laws.