By Anush Dashtents
An international organization promoting civic activism around the world voiced on Thursday its support for a controversial government bill regulating taxation of imported humanitarian assistance.
The draft Law on Benevolence passed by the parliament in the first reading last February is meant to curb what government officials say is a widespread abuse of existing legislation exempting humanitarian goods from the 20 percent value-added tax (VAT). Under the bill, the exemption will be abolished. Domestic and international benevolent organizations will be entitled to a full VAT rebate if they prove to a special government commission that their cargoes are not for commercial use.
Some Western relief agencies operating in Armenia have expressed concern at the measure, warning that it could result in a substantial decrease of humanitarian aid sent to the impoverished country.
But a senior official from the Washington-based International Center for Non-Profit Law (ICNL), Leon Irish, dismissed the concerns, describing the bill as “exceptionally good.” Irish, who is the ICNL’s president emeritus, spoke at a roundtable discussion of the issue in Yerevan attended by government officials, representatives of non-governmental organizations and foreign legal experts.
Before the preliminary passage of the proposed legislation, the government’s Commission on Humanitarian Assistance already had authority to exempt imports which it deemed “benevolent” from VAT. Officials say the new law would place the body under the oversight of tax and customs authorities and thereby make its decisions less discretionary.
Some experts estimate that as much as 80 percent of goods entering Armenia as “humanitarian” supplies have nothing to do with benevolence.
Official figures meanwhile show that the amount of humanitarian aid, on which Armenia has relied heavily over the past decade, has been steadily declining, reflecting the country’s new development priorities. According to them, Armenia received 25 billion drams ($45 million) worth of humanitarian goods last year, down from 40 billion drams registered in 2000.