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Official News

Thursday, 11 October 2012

Strictest Sanctions To Be Imposed On Tax Evading Medical Institutions

Prime Minister held a consultative meeting at the Ministry of Healthcare to discuss corruption and other irregularities.

The meeting was attended by Minister of Healthcare Derenik Dumanyan, managers of medical institutions and other government agencies.

”A month ago, the government held a consultation where we discussed tax obligations and healthcare system problems. The President has indicated that apart from the financial issues, the system is facing serious problems associated with getting drugs. The State Revenue Committee and other services have been conducting surveys on their compliance with tax obligations and the procurement processes,” the Prime Minister said.

Head of State Revenue Committee Gagik Khachatryan reported that inspections had been carried out with several healthcare institutions.

“Measurements are evidencing a 50% daily increase in activities while over 50 companies have reported losses. In other words, there are serious problems with the profits. All the entities must face up their own tax returns. Otherwise, our actions will be undesirable as we will have to resort to operational intelligence and investigation. We closely follow the developments in the pharmaceuticals market to ensure that it is manageable and under control,” Gagik Khachatryan noted.

SRC Deputy Chairman Armen Alaverdyan said that the inspections conducted in medical institutions have revealed obvious cases of tax evasion.

“The main emphasis is laid on the institute of measurements in order to see through the organizations’ actual turnover. 95 such papers have been studied nationwide, of which 15 represented at least 40% deviation from the actual turnover. In some cases this figure goes up to 80-90%. At the same time, the turnover and tax rates produced are at odds with the country’s overall economic growth indices, while 50 percent of the organizations keep on stating losses,” Armen Alaverdyan stated.

The SRC Deputy Chairman said that not all medical services are recorded and the citizens do not get cash coupons.

"It is not always that real wages are stated, wages suffer from shadow phenomena resulting in low income taxes and welfare payments,” Mr. Alaverdyan noted.

Ministry of Finance internal audit and financial control department head Sona Gharibyan reported that the study of public procurement in the healthcare sector has revealed AMD84.2mn unjustified purchases and 140 million-worth inefficient spending in just two categories.

Since 2009, the Ministry of Health has conducted 4 purchases of Xeloda / Kapetsitabin which is used in applied oncology. Note that as of June 1, the price of a tablet was 2670 dram, while in the months of September, November and December it was bought at the cost of AMD1875 a tablet. The whole consignment was supplied to the Oncology Center after Fanarjyan.

At the same time, through direct purchase, the Oncology Center acquired the same medication at AMD 1167 in February 2009. Thus, the Ministry of Healthcare has acquired the given medicine at a much higher price than the hospital.
Sona Gharibyan informed at the same time that Alimta medication expiry time of consumption resulted in lower rates of more than 140 million possible loss of state funds, inefficient spending, which is determined by the Ministry without adequate monitoring, without a specific drug to study the unreasonable demand in procurements.

There is also the opposite phenomenon. For example, over the past 3 years, badly needed in the field of psychiatric services, “Ziprexa” drug has been regularly bought for some 250 patients while the actual demand is twice as high.

Chairman of the State Commission for Protection of Economic Competition Artak Shaboyan informed that many cases are discovered when the health sector economic entities anticompetitive acts, and as a result a number of companies subject to liability.

”Studies have shown that in many cases by Hospital shopping contests are held, flagrantly violating procurement legislative demands 134 procurement processes is a result of the study showed that 100 of them were not in competition, they have to decide where to shop perform all such cases, when the competitions are organized, one-way deals are done, it turned out that the price paid for the product was much higher than the real value,” Mr. Shaboyan said.

Addressing the meeting, the Prime Minister said, “We expect that you will present the real picture of salaries so that we will witness wage increases in medical institutions. This is what our medical staff is expecting at this point of time. You should refrain from the payment of “black” salaries. Our studies indicate that a sharp increase in wages must occur. People ought to get legitimate wages.

All blacklisted organizations will be deprived of State funding, will undergo Ministry of Healthcare-conducted inspections which may lead to the withdrawal of licenses.

Do not compel us to make up a blacklist and resort to inspections. We do not want to use these instruments, but shadow economy will have to be reduced in this sector.

Mr. Doumanyan, all these reports mean that you have the chance to proceed to determined action with the support of government agencies. Rest assured that you will be backed in your efforts.”

Health Minister Derenik Dumanyane thanked the head of government for thoughtfulness and assured that all the problems discussed will be kept in focus. He promised to analyze the facts and make the necessary conclusions.

July 2022