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BLAME GAME: DIASPORA INVESTORS SQUARE OFF WITH ARMENIA'S TAX OFFICIALS DURING LIVE TV LINK-UP
Kristine Aghalaryan
HETQ
21:07, February 24, 2012
On February 24, a special live TV link-up between Armenia and the U.S.
brought together diaspora investors, lawyers and tax authorities
from Armenia to take a look at the issues involved regarding doing
business in Armenia.
The link-up was organized by a group in Armenia that come out in
support of the interests of diaspora investors. No one would argue
that there is a lot of ground to cover on the topic.
One such investor, Edmond Khutyan, related how his company Arin
Capital, had been criminally charged with tax evasion and premeditated
bankruptcy eight months ago but he has yet to be questioned by Armenian
tax officials on the matter.
Khutyan lawyer Nikolai Baghdasaryan noted that this negatively reflects
on Armenian tax officials.
"If they don't call the director in while at the same time charging
the company doesn't it leave the impression that a double standard
is at work?" Baghdasaryan asked.
Participating in the discussion was Armen Alaverdyan, First Deputy
to the President of the RA State Revenue Committee.
Alaverdyan confessed that he didn't know the details of the Khutyan
case. He only said that if the SRC has taken the matter to court it
would definitely see it to its conclusion. The tax official promised
to look into the matter, adding that if premeditated bankruptcy is
the charge he didn't believe that it would take a mere 1 or 2 months
to resolve.
Alaverdyan stressed that diaspora investors can not only take advantage
of the same rights as local Armenian businesspeople but aspects of
foreign legislation as well. He sounded a more optimistic note than
the lawyers representing diaspora investors and pointed to several
success stories like VivaCell, Tufenkian and even Parisian Coffee. (The
latter establishment was recently sold by its diaspora owner after
she complained of heavy-handedness by Armenian tax officials.)
Alaverdyan noted that oftentimes diaspora investors are not adequately
informed as to Armenian tax laws and this leads to a feeling that
they are operating on an unlevel playing field. He said the government
must do more to assist investors in this area.
He added that diaspora investors procrastinate in terms of petitioning
the SRC and other agencies when problems arise. "They want to use the
tax agency as a tool to force people to assume their obligations,"
Alaverdyan said.
Also on hand was Vardan Marashlyan, Deputy Minister for Diaspora
Affairs, who said that the ministry was doing all it could to assist
diaspora investors and businesspeople who sought help.
Heritage Party MP Stepan Safaryan countered by saying that the ministry
needs to be more pro-active in this regard and offer more outreach
and information to prospective investors.
Marashlyan noted that the ministry was not involved in the Nareg
Hartounian case since no one had asked for their assistance.
(Hartounian and his family's GH Storage Enterprises has been charged
with tax evasion)
MP Safaryan recounted a recent visit to Armenia by a group of U.S.
Congressmen. Safaryan noted that during meetings with the Armenian
president and speaker of the parliament, the congressmen declared
outright that Armenia was sliding backwards due to the lack of a
favourable investment environment and that even diaspora investors
didn't want to do business in the country.
MP Safaryan said what's at issue isn't the case of one or two
individual investors but a more widespread and systematic lack of
faith in getting a fair shake.
He warned outside investors not to be taken in by sweet-talking local
Armenian con artists who apply for a job, present a good face, and
then take the investor for a ride.
MP Safaryan noted that problems are exacerbated since diaspora
Armenians can't really understand the ins and outs of the business
reality and mentality at work in Armenia and avoid settling matters
in the way things are traditionally done in the country.
The Heritage Party legislator pointed to the Lincy Fund backing out
of further investment in Armenia and the Millennium Challenge Grant
stopping further aid as two glaring examples of the problem.
SRC's Alaverdyan pointed to the case of Parisian Coffee as a success
story, noting that when owner Askhen Gortzounian launched the business
in 2007 it got off to a promising start. The official noted that
in 2010 the business (newly registered as Parisian Coffee Factory)
had sales of 90 million AMD and 320 million in 2011.
He said that if the company, say, imported 92 million AMD worth of
product in 2010 and paid 6.5 in tax, in 2011, the company had imports
of 171 million and paid 31 million in tax. Alaverdyan claimed that
such figures pointed to a profitable business.
Alaverdyan argued that most of the problems faced by diaspora investors
stemmed from getting involved with unscrupulous individuals who are
placed in positions of management. This, he said, oftentimes leads
to civil disputes regarding property and ownership issues.
The SRC official advised prospective investors to get in touch with
his agency first before actually starting any commercial enterprise
in Armenia.
Alaverdyan conceded that tax agencies in Armenia needed to improve
the way complaints are handled and to make the process all the more
transparent.
ARF MP Ara Nranyan said these issues are faced not only by diaspora
investors but everyone dealing with the tax agencies, court system
and property registry (Cadastre).
MP Nranyan cited the example of George Tomasyan, a resident of Germany
who managed a business in Armenia and was swindled out of 70 million.
Emotions flared when Asya Asatryan, a reporter from the States,
got into the discussion.
She argued that if Armenia got its act together on this issue, people
in the diaspora wouldn't be raising such a fuss.
"You won't find one American-Armenian who wants to discredit Armenia.
If the name of Armenia is being dragged down, it's the fault of the
government's failure to set things right," Asatryan charged.
Armen Alaverdyan found the reference to Armenia's dignity a bit much
to take. He responded by saying that individual cases of corruption by
Armenian official or citizens should be reported, rather than taking
cheap swipes at the entire government.
"I am proud that I am a citizen of Armenia. Twenty years ago we had
nothing and now we are discussing these matters out in the open. I'd
say we're on the right track," Alaverdyan said.
Kristine Aghalaryan
HETQ
21:07, February 24, 2012
On February 24, a special live TV link-up between Armenia and the U.S.
brought together diaspora investors, lawyers and tax authorities
from Armenia to take a look at the issues involved regarding doing
business in Armenia.
The link-up was organized by a group in Armenia that come out in
support of the interests of diaspora investors. No one would argue
that there is a lot of ground to cover on the topic.
One such investor, Edmond Khutyan, related how his company Arin
Capital, had been criminally charged with tax evasion and premeditated
bankruptcy eight months ago but he has yet to be questioned by Armenian
tax officials on the matter.
Khutyan lawyer Nikolai Baghdasaryan noted that this negatively reflects
on Armenian tax officials.
"If they don't call the director in while at the same time charging
the company doesn't it leave the impression that a double standard
is at work?" Baghdasaryan asked.
Participating in the discussion was Armen Alaverdyan, First Deputy
to the President of the RA State Revenue Committee.
Alaverdyan confessed that he didn't know the details of the Khutyan
case. He only said that if the SRC has taken the matter to court it
would definitely see it to its conclusion. The tax official promised
to look into the matter, adding that if premeditated bankruptcy is
the charge he didn't believe that it would take a mere 1 or 2 months
to resolve.
Alaverdyan stressed that diaspora investors can not only take advantage
of the same rights as local Armenian businesspeople but aspects of
foreign legislation as well. He sounded a more optimistic note than
the lawyers representing diaspora investors and pointed to several
success stories like VivaCell, Tufenkian and even Parisian Coffee. (The
latter establishment was recently sold by its diaspora owner after
she complained of heavy-handedness by Armenian tax officials.)
Alaverdyan noted that oftentimes diaspora investors are not adequately
informed as to Armenian tax laws and this leads to a feeling that
they are operating on an unlevel playing field. He said the government
must do more to assist investors in this area.
He added that diaspora investors procrastinate in terms of petitioning
the SRC and other agencies when problems arise. "They want to use the
tax agency as a tool to force people to assume their obligations,"
Alaverdyan said.
Also on hand was Vardan Marashlyan, Deputy Minister for Diaspora
Affairs, who said that the ministry was doing all it could to assist
diaspora investors and businesspeople who sought help.
Heritage Party MP Stepan Safaryan countered by saying that the ministry
needs to be more pro-active in this regard and offer more outreach
and information to prospective investors.
Marashlyan noted that the ministry was not involved in the Nareg
Hartounian case since no one had asked for their assistance.
(Hartounian and his family's GH Storage Enterprises has been charged
with tax evasion)
MP Safaryan recounted a recent visit to Armenia by a group of U.S.
Congressmen. Safaryan noted that during meetings with the Armenian
president and speaker of the parliament, the congressmen declared
outright that Armenia was sliding backwards due to the lack of a
favourable investment environment and that even diaspora investors
didn't want to do business in the country.
MP Safaryan said what's at issue isn't the case of one or two
individual investors but a more widespread and systematic lack of
faith in getting a fair shake.
He warned outside investors not to be taken in by sweet-talking local
Armenian con artists who apply for a job, present a good face, and
then take the investor for a ride.
MP Safaryan noted that problems are exacerbated since diaspora
Armenians can't really understand the ins and outs of the business
reality and mentality at work in Armenia and avoid settling matters
in the way things are traditionally done in the country.
The Heritage Party legislator pointed to the Lincy Fund backing out
of further investment in Armenia and the Millennium Challenge Grant
stopping further aid as two glaring examples of the problem.
SRC's Alaverdyan pointed to the case of Parisian Coffee as a success
story, noting that when owner Askhen Gortzounian launched the business
in 2007 it got off to a promising start. The official noted that
in 2010 the business (newly registered as Parisian Coffee Factory)
had sales of 90 million AMD and 320 million in 2011.
He said that if the company, say, imported 92 million AMD worth of
product in 2010 and paid 6.5 in tax, in 2011, the company had imports
of 171 million and paid 31 million in tax. Alaverdyan claimed that
such figures pointed to a profitable business.
Alaverdyan argued that most of the problems faced by diaspora investors
stemmed from getting involved with unscrupulous individuals who are
placed in positions of management. This, he said, oftentimes leads
to civil disputes regarding property and ownership issues.
The SRC official advised prospective investors to get in touch with
his agency first before actually starting any commercial enterprise
in Armenia.
Alaverdyan conceded that tax agencies in Armenia needed to improve
the way complaints are handled and to make the process all the more
transparent.
ARF MP Ara Nranyan said these issues are faced not only by diaspora
investors but everyone dealing with the tax agencies, court system
and property registry (Cadastre).
MP Nranyan cited the example of George Tomasyan, a resident of Germany
who managed a business in Armenia and was swindled out of 70 million.
Emotions flared when Asya Asatryan, a reporter from the States,
got into the discussion.
She argued that if Armenia got its act together on this issue, people
in the diaspora wouldn't be raising such a fuss.
"You won't find one American-Armenian who wants to discredit Armenia.
If the name of Armenia is being dragged down, it's the fault of the
government's failure to set things right," Asatryan charged.
Armen Alaverdyan found the reference to Armenia's dignity a bit much
to take. He responded by saying that individual cases of corruption by
Armenian official or citizens should be reported, rather than taking
cheap swipes at the entire government.
"I am proud that I am a citizen of Armenia. Twenty years ago we had
nothing and now we are discussing these matters out in the open. I'd
say we're on the right track," Alaverdyan said.