Another Kick to Small and Medium-Sized Construction Enterprises
Source: https://www.construction.am
#law #armenia #economy #construction
According to the amendments to the RA Law "On State Due" passed by the Parliament of Armenia at the end of 2010, the annual rate for the right to carry out construction works was raised four times (from 100 000 AMD to 400 000 AMD), and has already led to the dismay of many construction companies. Recent media reports about expressed dissatisfaction of construction companies in Gyumri, is only the visible part of the iceberg of discontent.
We agree with Gyumri contractors opinion, that changes in this Law are made absolutely not at the right time. World economic crisis, which in Armenia first of all hit the construction industry , catastrophically reducing the share of construction in the country's GDP, has put many contractors throughout the country to the brink of bankruptcy. In this situation, the Government should find the right way to help these companies survive, but not to strangle them eventually...
The most disastrous consequences of this change is much more possible for small and medium-sized construction companies, which are now in a deplorable state. After all, the legal concept of "licensed construction work" is used not only for the construction of big projects, but includes any construction work that requires building permit, including small-scale construction, such as openings in existing walls, replacing the old wooden floors, construction of a small house or building, which are the small company's main activities. When getting license for listed construction activities these small companies automatically become 20% VAT payers(under VAT law) and appears outside of equal competition with many shadow and remodeling bodies (see article).
The desire of any government to provide budget revenues are quite normal, but the methods of goal achievement should not be incongruous with today's situation in economy (and construction industry) and the mood of business society, and must not completely kill the entrepreneurial spirit, which already tremendously decays in recent years.
Read law changes here (in Armenian)
We agree with Gyumri contractors opinion, that changes in this Law are made absolutely not at the right time. World economic crisis, which in Armenia first of all hit the construction industry , catastrophically reducing the share of construction in the country's GDP, has put many contractors throughout the country to the brink of bankruptcy. In this situation, the Government should find the right way to help these companies survive, but not to strangle them eventually...
The most disastrous consequences of this change is much more possible for small and medium-sized construction companies, which are now in a deplorable state. After all, the legal concept of "licensed construction work" is used not only for the construction of big projects, but includes any construction work that requires building permit, including small-scale construction, such as openings in existing walls, replacing the old wooden floors, construction of a small house or building, which are the small company's main activities. When getting license for listed construction activities these small companies automatically become 20% VAT payers(under VAT law) and appears outside of equal competition with many shadow and remodeling bodies (see article).
The desire of any government to provide budget revenues are quite normal, but the methods of goal achievement should not be incongruous with today's situation in economy (and construction industry) and the mood of business society, and must not completely kill the entrepreneurial spirit, which already tremendously decays in recent years.
Read law changes here (in Armenian)
