The Government proposes to make amendments and addenda to the Tax Code and the Law on State Duty aimed at making the royalty system paid by mining companies fairer, more efficient and more responsive to international metal prices.
The legislative package was debated at the NA regular sitting on May 24.
According to the Deputy Minister of Finance Arman Poghosyan, the need to adopt the draft laws is conditioned by the fact that prices in international metal markets have been steadily rising since the 2020 autumn. In this case, the current royalty system does not, in fact, allow to distribute new value formed in the sector between the Government and the economic entities representing the given sector honestly.
According to Arman Poghosyan, the solution gave the desired result, but, nevertheless, the introduced system of the state duty cannot be described as long-term, because it does not depend in the results of financial and economic activity of companies and, in fact, both metal prices and expenses incurred by the companies of the sector are not taken into account and therefore also the profitability of the companies.
So, the legislative package proposes to suspend the application of copper and molybdenum concentrate, as well as the state duty on the export of molybdenum from January 1, 2023, maintaining the general principals based on the current royalty system, making it more progressive.
The Deputy Minister informed that the draft has come long way for debate. Working debates with the economic entities representing the sector were held.
The Deputy Chair of the Standing Committee on Economic Affairs Babken Tunyan presented the endorsement of the NA Head Committee.
The Committee Chair noted that in addition to the profit tax, the mining companies also pay royalties. According to the deputy, it was previously announced that the export duty will be temporary.
The deputy expressed hope that after the final adoption of the legislative package, there will be a regulation, which will not be amended for a long time.