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Official News

Thursday, 2 May 2013

Inspection Reform Takes Effect








A Cabinet sitting was held today, chaired by Prime Minister Tigran Sargsyan.

The meeting commissioned all ministers, heads of government agencies, regional governors and community heads to take note of Finance Ministry’s annual report on budgetary control in 2012, as well as to take the necessary steps in order to rule out the stated irregularities and shortcomings in future.

Prime Minister Tigran Sargsyan highlighted the fact that the number of planned inspections has been reduced eightfold over the five-years: “This is an important achievement from the perspective of inspection reform. Despite a sharp fall in checks and inspections, we can see that the risk-based oversight is justified as it has led to increased effectiveness. Targeted checks are carried out in the most at-risk areas and facilities, and we can see that the eightfold decline in the number of checks has led to increased recovery volume, especially in 2011. This means that that in 2013 we will have to choose the right targets to provide for sizeable recoveries.”

The government discussed a bill on streamlining the mining-sector operations carried out by companies registered in offshore zones, which was presented to the National Assembly by MP Hrant Bagratyan as a legislative initiative. The bill seeks to drastically reduce the scope of shadow economy in the mining sector. While the government itself is concerned about the possibility of tax evasion, we do believe that the bill is problematic in legal terms and cannot offer an effective tool to manage these risks.

In turn, the government has already submitted a bill on transfer pricing and is currently drafting amendments to the law on subsoil in an effort to achieve greater effectiveness in this field. For this very reason, the government considers it inappropriate to adopt the bill in the format proposed by Mr. Bagratyan.

Summarizing the discussion, Prime Minister Tigran Sargsyan stated the following, “The government’s view is that we should be bring under strict control the activities of those offshore companies making investments in Armenia or involved in the export and sales of goods, because there are serious risks implying non-compliance with the financial obligations assumed before the Republic of Armenia. In this regard, Mr. Bagratyan’s views are in line with the government’s policy. I feel that Mr. Gabrielyan's approaches may provide a basis for drafting more effective laws in cooperation with Mr. Bagratyan.”

The Cabinet agreed to the proposal on signing an agreement between the governments of Armenia and Russia on setting up a Russian Gymnasium Foundation in Armenia.

The meeting decided to allocate AMD10mn in State support for the reconstruction of Oktet N6 music school after Azat Shirinyan in Gyumri. Implemented under the “Rock Supports Armenia / Armenia is Grateful to Rock” program, the project is nearing completion. The music school will be reopened this September, attended by Deep Purple-vocalist Ian Gillan. USD110, 000 was raised in 2009-2012. In 2012 the Mardikyan Family Foundation tripled this amount. USD21,200 worth of musical instruments to be donated by Millbank Music Store owner Tim Irving.

The Ministry for Foreign Affairs was provided around AMD168mn to open Armenia’s Embassy in the Kingdom of Sweden. The Embassy is supposed to promote the Armenian-Swedish bilateral relations, including in trade and economy.
In conclusion, the meeting decided to substitute the working Friday of May 10, 2013 with the Saturday of May 18, 2013.

The next Cabinet sitting will be held on this May 8.
 

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