Businesses Affected By Floods To Get Compensation Based On Tax Contributions

Economy Minister Gevorg Papoyan said that the decision was based on a thorough study and consultations with companies and individual entrepreneurs who incurred losses as a result of the May flooding in the area.

“The goal is to alleviate the financial burden on affected businesses and assist in restoring their normal activities,” Papoyan told the cabinet.

An estimated 150 companies and individuals engaged in economic activities have been affected by the floods. Under the government decision, support will be differentiated based on the level of damage. Businesses in affected areas will receive compensation ranging from 6,600 to 24,800 drams (about $17 to $63) per square meter, depending on the extent of the damage.

Additionally, the government has set the maximum financial support at 1.2 million drams (a little over $3,000).

The compensation for repairs and damaged goods will also consider the amount of taxes paid by each company or entrepreneur last year. Support will be provided at rates of 50, 70 and 100 percent of the taxes paid, depending on the degree of damage.

Prime Minister Nikol Pashinyan acknowledged that some business owners might be dissatisfied with this support formula but described the approach as fair.

“This is a case where we encourage people not to view their taxes as simply giving away their earned money, but as transferring it from one pocket to another. Now these businessmen will get as much as they took out of one pocket and put in another, so to speak, for a rainy day. I believe this is a very fair and important approach,” the prime minister said.

The government has also established a compensation mechanism for farmers affected by the floods under which those who are registered as economic agents with their respective communities will receive 100-percent compensation for lost animals, destroyed trees and damaged fields. Under the decision, unregistered farmers will receive compensation in the amount of 50 percent of the damage they incurred, except for cattle. Villagers with damaged garden plots are also eligible for compensation, according to the government.