Gagik Tsarukyan’s interview with «hayastan.news»
Hayastan.news asked Gagik Tsarukyan questions regarding issues of concern to citizens and social protests.
Hayastan.news: Mr. Tsarukyan, recently, various social protests related to transportation, taxes, etc., have been taking place in Yerevan every day. What does this indicate, and where might this process lead?
Gagik Tsarukyan: First of all, one clarification: protests are occuring not only in Yerevan but also in various parts of Armenia, as these issues are not exclusive to Yerevan. The protests address the fourfold increase in property tax, significant hikes in waste disposal fees, the process of animal slaughter and meat sales in the regions, and the overall attitude of state and local authorities toward our citizens. Yes, there is a wave of serious public discontent in the country, requiring an adequate response. Without such a response, this process could lead to serious internal instability. Every voice must be heard.
Hayastan.news: The raised issues and questions receive different, sometimes contradictory assessments. The authorities say one thing, the opposition another, and protesters yet another. How can we discern the truth?
Gagik Tsarukyan: You know, I am aware of the problems not from the statements by ministers, officials, and deputies, but from ordinary people. Unlike many, I communicate daily with ordinary and hardworking individuals facing difficulties. I know the reality very well. And now I am ready to speak candidly with our people, with various segments of society.
Let’s start with transportation. It’s evident that a “MAN” bus is better than a “Gazelle”; there’s no comparison. So why are people complaining? Is the issue that the fare is increasing by 50 drams, or that a simple and understandable transportation development plan wasn’t offered?
The problem is multifaceted. If a “MAN” bus designed for X passengers carries 2X people, it creates a situation identical to the “Gazelle” where passengers are cramped, coughing, sneezing, pushing, etc. Before implementing changes, they should be discussed with professional groups and the public. Public discussions on these issues were either absent or merely formal; otherwise, the public wouldn’t be protesting. Our citizens weren’t presented with clear and transparent information about transportation service costs, expenses, and expected profits under the new fare. I wonder if there is anything secret there? The cost of all services should be based on a price-quality formula. Currently, they can’t even provide quality service because transportation quality isn’t just about the bus, which can be overcrowded at times, but also about well-equipped stops, accurate bus schedules, etc.
Regarding the increase in public transport fares, it’s essential to understand why a 150-dram fare is necessary and what profit is derived under these conditions. As long as these questions remain unanswered, people will continue to protest. One person says the cost price is this much; another says it’s 4-5 times more. When the fare changes 10 times, it raises suspicions among people. We need to halt this process, conduct transparent calculations, discuss issues with specialists, examine other countries’ experiences, and present the correct picture to people. Otherwise, we’re further complicating our citizens’ lives. Let’s not forget that we’re talking about public transport, which doesn’t necessarily have to be profit-driven; it’s meant to make people’s lives easier, not to run a business. In many countries, it’s even free. With the increase in other service prices, taxes, and fees, additional large sums enter the budget; perhaps we can subsidize public transport fares from these funds and not place the burden on ordinary people. If we think this way, the approach will change entirely, and appropriate, correct solutions will be found.
Another problem is the involvement of notaries, lawyers, accountants and others in general taxation. How should these people pay higher taxes? Of course, they should raise the prices of their services. They have no other source of money. The only source of money is an ordinary person. Now he will pay more for the same services. If a person makes a deal, he must contact a notary, there is no other alternative. It turns out that in this way they directly raise prices for notary services. Then they say: “why are people complaining?” So, what should they do, be happy that they will pay more for the same service? The same applies to lawyers: people will not be able to pay money for their defense. Now they barely pay, now even many cannot hire a lawyer and defend their rights. And when prices rise, what will they do? Lawyers are also deprived of the opportunity to defend for free: a person will not be able to help his relative, friend, or anyone who turned to him for help in a difficult moment. How can this be?
The next problem is related to the increase in turnover tax. There are areas of business that simply won’t be able to work. Calculations show that people everywhere will close businesses and be out of work. Is that what we want? This is a business based on its laws and simple calculations. I communicate with these people every day, I know in detail the possibilities of their business, their problems, bitterness and pain. And I’m telling you, if the business closes, people won’t be able to work, pay taxes, and support their families.
I also suggest that you pay attention to the fact that not only those who barely make ends meet complain, but also those who receive high salaries. This means that the overall socio-economic environment has deteriorated, which means that there has been a very deep recession that needs to be taken very seriously. An increase in the property tax is also expected soon, which will affect everyone. In the conditions of serious social problems, tax increases, and serious price increases, this will be an additional heavy blow for many people. By the way, this will lead not only to social difficulties, but also to shocks and changes in the real estate and rental market, and the consequences of this are very difficult to predict. I would recommend the following: keep the current amount of property tax, and postpone the last stage of the increase, which will create serious difficulties for people, or freeze it for at least 3-5 years until the general social background in the country stabilizes, people will not be able to get used to the new rules, calculate their expenses, incomes, otherwise this chaos won’t lead to anything good.
Another problem is the issue of declaration of individuals. I assure you that 90 percent of people do not know how and what they will fill in? Do the people who write these laws have any idea how a simple hardworking person lives? Have they ever been in the villages? And what kind of income are we talking about to declare? The fact that the terms and conditions of all changes are constantly changing suggests that they are imperfect and poorly calculated.
Hayastan.news: You said that there is a wave of serious social discontent in the country, and this requires an adequate response. What does “adequate offer” mean, what do you propose?
Gagik Tsarukyan: I also have a question, have the heads of structures that double turnover taxes calculated how many enterprises can close, how many jobs will be closed and how many families can emigrate? Complaints from small businesses are not unexpected at all, people are fighting for their survival, this is already a social issue. Look: they set themselves the task of documenting the entire volume of goods and services purchased by small and medium-sized businesses. It’s almost impossible, and everyone knows it. However, the percentage of turnover tax depends on this. We need to find a way not to offend small and medium-sized businesses, not to burden them to such an extent that they stop breathing.
Life shows that changes are poorly calculated, they need to be finalized and studied in more depth. Therefore, I believe that they should be temporarily frozen, and we should talk to specialists and beneficiaries. We cannot call this a “reform” when all representatives of this sphere are suffering. There is no such reform. This way the tension will not subside. Any government should talk to representatives of this sector before making such changes. Neither the force method nor the non-discussion option works. I suggest that it would be better to impose a large business with a large tax, but leave alone the people who pay the turnover tax. There are about 2–3 thousand large businesses, and about 60-70 thousand small and medium-sized ones. Why was the turnover tax introduced many years ago? There is only one answer: to stimulate small and medium-sized businesses. Now, if we want to give up the idea of helping them, we have to say so. You can’t experiment with people and businesses. Small and medium-sized businesses are an important foundation of the state. If these layers of business are destroyed, the consequences will be catastrophic.