Finance minister stresses need for clear accountability system in proposed income tax contribution mechanism
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The maximum amount that can be allocated as contributions to non-governmental organizations (NGOs), media outlets and political parties from paid income tax has not yet been determined, Finance Minister Vahe Hovhannisyan has said.
According to the finance minister, a clear and straightforward accountability system is also important in the proposed system so that citizens understand what their money is being allocated to.
The minister explained that to use the new opportunity, citizens must have an unused balance of paid income tax. If the income tax has been fully refunded, for example, under the mortgage interest refund program, it will not be possible to make a new allocation from that amount.
“The principle will be that a person must allocate that money from the income tax they have paid. If they have no remaining balance of paid income tax, meaning they have already used it up, for example, by receiving a refund through the mortgage program, they will not be able to do so,” Hovhannisyan said at a press briefing.
It has also not yet been clarified whether the new opportunity will be included in the existing limit for social expenditure refunds, which currently stands at a maximum of AMD 100,000, or whether it will operate separately.
“No decision has yet been made on whether this will be in addition to the existing AMD 100,000 or included within that amount. We will discuss it once those decisions are made,” he said.
Journalists also asked whether the criteria to be set by the government could result in media outlets critical of the authorities being deprived of the proposed funding. Hovhannisyan rejected such an interpretation, saying that the aim is to establish a clear and understandable accountability system.
According to him, a citizen providing support should be able to easily obtain information about the activities of the media outlet concerned. At the same time, accountability requirements should not create an unnecessary burden.
“Obviously, a 100-page report would not be good; in other words, we would not achieve our goal. But we need to set some minimum requirements. We need to understand what those minimum requirements should be so that we do not make things too complicated or create too much of a burden, while ensuring proper transparency,” Hovhannisyan said.
Hovhannisyan linked the purpose of the draft to strengthening the independence of media outlets. According to his presentation, public funding should encourage media outlets to be guided by citizens’ information needs in their work.
Addressing a question about the confidentiality of donors’ personal information, the minister said that such information would be considered personal data. He referred to the existing mechanisms at the State Revenue Committee for protecting tax and income information, adding that any potential concerns could be discussed separately.
On September 17, the government approved a draft set of amendments to the Tax Code proposing to include, within the framework of social expenditure refunds, contributions made by citizens to NGOs, organizations engaged in media activities, individual entrepreneurs and political parties.