YEREVAN. – At Wednesday’s Cabinet meeting, the government approved the draft amendments to the Tax Code, whereby property tax will increase in Armenia.

Minister of Finance Atom Janjughazyan presented the issue, noting that they have decided to tax real estate corresponding to wealth.

He noted that Armenia lags behind among 38 countries in terms of the property tax/GDP ratio. "This is due to the fact that the real estate’s cadastral value, which differs significantly from the market value, is taken as a basis for taxation [in Armenia]. As a result of this change, the potential of property taxes is expected to increase 4.3 times; this will allow communities to provide better quality when resolving their problems,” Janjughazyan said.

The minister informed that this new system will be introduced gradually within three years, and not the market values, but the values that are close to the market values will be used as a basis for real estate taxation in Armenia.

As a result of the proposed changes, it is expected to also increase the level of financial stability and independence of local self-government.