The Armenian government has controversially moved to empower tax authorities to temporarily freeze bank accounts and other assets of companies failing to pay taxes on time.
The National Assembly debated corresponding draft amendments to an Armenian law on taxes on Thursday. They would allow the State Revenue Committee (SRC) to seize company assets for up to 30 days in case of unpaid taxes exceeding 500,000 drams ($1,370).
The existing law stipulates that the SRC can not do that without a court authorization.
Armen Alaverdian, a deputy head of the SRC who presented the bill, argued that the tax agency would continue to need court rulings for sanctioning unscrupulous corporate taxpayers. But some parliamentarians, including those with business interests, remained unconvinced, expressing concern about the measure.
Ara Nranian of the opposition Armenian Revolutionary Federation strongly criticized it. “If this is used as a baton against entrepreneurs, then not only tax revenues won’t rise but the already struggling businesses will die,” he claimed.
Davit Harutiunian, the pro-government chairman of the parliament committee on legal affairs, suggested that the proposed amendments are at odds with Armenia’s constitution, which states that property ownership can be restricted or forcibly changed only by courts. “Doesn’t this mean that we are restricting the right to property by extrajudicial means?” he asked Alaverdian.
The SRC official revealed that the government already authorized his agency to freeze assets without court decisions several years ago, when Harutiunian served as justice minister. The draft amendments, if passed by the Armenian parliament, will only formalize that practice, he said.
Alaverdian made clear at the same time that the government is ready to alter the bill before putting it to the vote.