Social benefits for public servants
Starting January 2012, social benefit package was introduced for Armenia's civil and public servants, state officials, as well as administrative and professional employees in state-run organizations in the spheres of culture, education, and social security.
The package envisaging allocation of 132000 AMD to each employee provides certain social services to approximately 120 000 public servants and their direct family members, the spouses and children up to 27 years of age, regardless of their positions and salary.
The social package includes mandatory health insurance, monthly payments of mortgage loans and tuition fees, as well as vacation in Armenia and Nagorno Karabakh.
52 000 AMD will be spent for mandatory health insurance monthly, accounting for 3.8 mln AMD per year. The insurance within this programme covers a range of medical services including neurosurgical and cardiac operations.
The social package does not comprise the staff reserve, state employees working less than six months, as well as high-ranking officials and those providing for technical support.
Free Trade Area agreement with EU
On February 20, the 27-member EU Trade Policy Commission unanimously approved the decision to launch negotiations with Armenia for Deep and Comprehensive Free Trade Area (DCFTA).
The positive decision of the Commission came as result of steps aimed at preparation of talks Armenia implemented during the past year. Launch of negotiations required legislative amendments, improved implementation of law and strengthening of relevant structures in areas related to foreign trade.
This agreement will provide Armenia with access to EU's 500 million market, with average $30-40 thousand GDP per capita and high purchasing power. Access to such large market will promote Armenia's economic development both in terms of quantity and quality, since only quality commodities can enter Europe. This will help introduce new capacities and technologies in the country and boost competitiveness.
Armenia marked 18-point progress in the annual Doing Business 2013 ranking of the World Bank and IFC, being now placed 32th instead of 50th.
Armenia is placed between the Netherlands (31th) and Belgium (33rd), leaving behind France (34th), Israel (38th), South Africa (39th) and Spain (44th).
According to this report, Armenia improved some of its indicators, in particular, “provision of construction permits” (46th), “electricity supply (101st)”, “protection of investors” (25th), and “taxation” (108th). Also, regress with regard to the following indicators was recorded: “registration of enterprises”, “loans”, “international trade”.
Singapore tops the list of countries with most favourable business environment. The top ten includes also Hong Kong, New Zealand, the U.S., Denmark, Norway, Great Britain, Korea, Georgia, and Australia.
Georgia still maintains its leading position (9th), followed by Estonia (21st), Latvia (25th), Lithuania (27th), Armenia (32nd), Kazakhstan (49th), Belarus (58th), Azerbaijan (67th), Kyrgyzstan (70th), Moldova (83rd), Russia (112th), Ukraine (137th), Tajikistan (141st), Uzbekistan (154th).
On September 27, the government of Armenia approved the bill on increasing the minimum salary up to 35000 AMD.
Currently the minimum salary in Armenia makes 32500 AMD.
The law is expected to enter into force starting January 1, 2013.
Introduction of new income tax model
The new Law “On Income Tax” becomes effective starting January 1, 2013.
Currently the most part of the monthly social insurance payment is provided by the employer, while the new law stipulates that starting January 1, the employees must pay the total sum from their salaries. For their part, the employers should raise the wages of their staff so that the actual income of the latters does not suffer.
Introduction of the new model of income tax is linked to the funded pension system launched in Armenia on January 1, 2011.
As of January 1, 2011, voluntary funded pension system was introduced in the country. Starting January 1, 2014 Armenia shifts to mandatory funded pension system comprising all citizens born after January 1, 1974.