Artsakh

Azerbaijani blockade of Nagorno Karabakh leads to widespread business closures, mass layoffs

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Azerbaijani blockade of Nagorno Karabakh leads to widespread business closures, mass layoffs

STEPANAKERT, MARCH 21, ARMENPRESS. 782 businesses were forced to shut down and 1,170 people lost their jobs in Artsakh (Nagorno Karabakh) as a result of the ongoing Azerbaijani blockade.

It has now been 100 days since the Azerbaijani blockade of Nagorno Karabakh began.

The blockade has led to significant economic impact and reduced tax revenues.

Manush Hovhannisyan, the Director of the Department of Revenue Registration and Organization at the Artsakh State Revenue Committee presented the situation to ARMENPRESS.

ARMENPRESS: What’s been the impact of the blockade on the tax revenues in Artsakh?

Hovhannisyan: During January-February of 2023, 4 billion 23,9 million drams in tax revenues and duties was collected to the state budget, which amounted to 75,9% of the projected 5 billion 300 million or 1 billion 276,1 million less. The collected revenues underperformed by 18,6% or 922,2 million less compared to the same period of the previous year. The decreased figures are a result of the partial of complete closure of businesses due to the situation in the economy resulting from the ongoing blockade of Artsakh by Azerbaijan.

ARMENPRESS: How many businesses have either partially or completely shut down operations?

Hovhannisyan: During the blockade 782 businesses, or 18,3% of the total, shut down operations, as a result 1,170 people became unemployed. 317 businesses, or 7,5%, are still open but were forced to lay off 1,502 employees, while the remaining businesses are working either partially or with government support. The closures pertain to nearly all sectors.

ARMENPRESS: Are there any tax privileges for businesses during the blockade?

Hovhannisyan: We have three relief programs for mitigating the socio-economic consequences of the blockade, the first one is being implemented by the State Revenue Committee, while the remaining two – which pertain to the unemployed persons – are implemented by the Ministry of Social Development and Migration. Given the three-year tax privileges instituted after the 2020 war, we don’t have the need to provide individual privileges at this stage. In 2023, businesses are still exempt from fixed and patent payments, while taxes for trade and general tax regime is determined by turnover.

ARMENPRESS: Who is eligible for the one-time grants and financial support?

Hovhannisyan: The government designated the 41 sectors of the economy that have been affected the most, such as retail and wholesale trade, construction, interstate passenger transportation, cargo transportation, restaurant businesses, mining industry – excluding the iron ore mining and some other areas. Private entrepreneurs in these sectors, with the exception of patent tariff payers, receive a 136,000-dram support, while the patent tariff payers receive 68,000. Under the one-time grant program, the support is in the size of taxes and social payments calculated by maximum of 136,000 drams per each employee, or the factual amount of revenue in case of the revenues being less. The support and grant payments began from February 21, 2023.

ARMENPRESS: How much money has been paid in support in total?

Hovhannisyan: As of March 17, 2023, a total of 555,6 million drams in support and grants was paid to 1,959 businesses.

The official added that the program’s application deadline was extended from the original February 28 to March 15 and the provision of payments is still ongoing. Applications from 400 other businesses are still being processed.

AREMNPRESS

Armenia, Yerevan, 0002, Martiros Saryan 22

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