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Do You find the new annual rate of 400,000 AMD for the right to carry out construction works justified?





Do You find the new annual rate of 400,000 AMD for the right to carry out construction works justified?Do You find the new annual rate of 400,000 AMD for the right to carry out construction works justified?

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).

According to the explanation of the License agency of the Ministry of Urban Development of Armenia, the amount intended for the licensing of construction companies actually declined from 100 000 to 80 000 AMD. It turns out that the sum of 400,000 drams stipulated by the law includes payment for all 5 types of construction licenses. Just before our many builders did not think that a previous license called "Residential, Industrial and Public" construction do not include even the installation of a one electrical plug. By the way, such issues may arise in the future too, since the License agency do not give the list of the permitted construction activities for specified license in writing.

Read law changes here (in Armenian)


2011-03-14


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