Taxed over Taxes: Pension reform continues to create chaos

Members of the civil initiative protesting against the mandatory pension reform are urging state bodies in Armenia to take respective steps and disperse the legislative chaos created in the economic entities of Armenia because of the new law on pension savings.

“I Object!” initiative member Davit Manukyan told the press on Thursday that they had received numerous employees’ complaints of especially state budget-funded entities where they report being threatened to choose a pension fund. Besides, numerous companies, discarding the Constitutional Court decision of January 24, made pension savings deductions from the salary for January.

“Pressures can be come across not only in the state system, the Central Bank, too, is pressuring trade banks to make their employees choose a pension fund,” says Manukyan.

Following the CC decision of January 24, suspending the application of two articles in the law until the final court ruling on March 28, some 240,000 citizens born after 1974 gained a temporary relief from making their selection of savings funds and fund managers, meant to have been completed by January 1, while employers got exempt from penalty and sanctions applicable by the law for failure to make or delay the mandatory savings payment.

Despite the CC interim decision, in January company accountants were forced to face a big issue, as the salary payment report forms already have the mandatory pension savings deductions, and the system does it automatically. Activists say the government should have first of all removed the line about the mandatory payment in the report form to be able to carry out the CC ruling.

“How are employers planning to compensate the money, if the CC declares it anti-constitutional, as the law does not provide for any refunding mechanisms,” ask members of the initiative.

Employees of Metsamor nuclear power plant, Haypost, and even the National Assembly have warned about the pension deductions from their salaries for January. At the same time, some major companies, such as Orange Armenia, Ashtarak Kat, Synopsis Armenia, the American University of Armenia, World Vision Armenia, the Armenian Caritas and others, have not made the respective deductions.

“I Object!” initiative member Gevorg Gorgisyan believes state officials’ claims that the part about the mandatory savings payment is impossible to remove from the online tax report form are groundless. As a programmer, he has offered his assistance with it.

Meanwhile, on Wednesday in the parliament, the Labor and Social Affairs Minister Artem Asatryan, responding to the question whether following the CC decision employers have the right not to make the mandatory payments to the pension funds, said that they are obliged to make the respective payments.

“The CC has ruled that sanctions will not be applied against employers who won't make the payments,” said the minister.

Today more than a thousand citizens protesting against the application of the new law held a “March for Rights” urging state bodies to fulfill their duties properly and refrain from creating a chaos. They voiced their appeal in front of the Ministry of Education and Sciences, the Government Building, the Central Bank, the City Hall and the State Revenue Committee.