By Ruzanna Khachatrian
The Armenian government’s efforts to significantly toughen punishment for rampant tax evasion looked set to face strong opposition in parliament on Monday, prompting criticism from three pro-establishment factions comprising wealthy businessmen.
Deputies representing speaker Artur Baghdasarian’s Orinats Yerkir Party as well as the People’s Deputy group and the United Labor Party (MAK) said they will vote against a government bill envisaging much longer jail terms and fines for such crimes. MAK leader Gurgen Arsenian was the most outspoken of them, denouncing the initiative as “malicious and malevolent.”
“The bill leaves large room for making subjective evaluations [of business activities],” Arsenian told fellow lawmakers.
“I am authorized to officially state that our objections to this bill are shared by the Orinats Yerkir Party,” he said. “We will do everything to prevent it from becoming a law of the Republic of Armenia.”
Samvel Balasanian, the leader of the Orinats Yerkir faction, the second largest in the National Assembly, confirmed the information. “We are against having such long jail sentences for tax evasion,” he told RFE/RL.
A member of the People’s Deputy, which is almost exclusively made up of businessmen, echoed the statement.
The government bill involves a package of amendments to the Criminal Code. If passed, they will allow courts to sentence business people convicted of hiding or underreporting their earnings to between three and seven years’ imprisonment. The maximum punishment for such crimes now is a two-year prison sentence.
The existing code also stipulates that individual taxpayers can be jailed for up to two months only if they cheat the taxman for than once. The proposed amendments would extend that limit to 12 months. They also call for heavier fines for tax-related offences.
Armenia’s Prosecutor-General Aghvan Hovsepian complained last summer that the existing sanctions against tax fraud are “absurdly soft” and must be revised. The relevant legal amendments were put forward in January at the start of a massive crackdown on tax evasion announced by the government.