Debt write-offs for soldiers' families and tax breaks for military service in Armenia

The Armenian parliament has passed a law titled ‘On Tax Benefits During War Time’, exempting donations from taxation to the state and the army.

The parliament also consented to a set of changes in the tax laws, which will allow for the writing off of debts for servicemen who have been wounded, and the debts of the families of those fallen in war will be written off as well.

In addition, an insurance fund for servicemen will pay compensation to the families of soldiers who fall, are wounded, or are missing in action. The fund director, Varuzhan Avetikyan, spoke about this at a press conference in Yerevan.

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Details on the tax and debt benefits

According to the law On Tax Benefits during War Time, companies and individuals who import goods for the government will be exempt from both customs duties and value-added tax, as well as environmental taxes (if those taxes apply during the transport of said goods).

 Moreover, the law has been backdated so as to be effective starting from 27 September, when the second war in Karabakh started. However, goods which were imported before that date and then later given to the government will still be taxed. 

 According to the amendments to the tax laws, non-performing loans given to participants in military activities, that is soldiers, conscripts, and volunteers, will be written off. These benefits will accrue to family members living with them as well, if the soldiers were killed or maimed in duty. The amendments have also been backdated to 27 September.

Compensation from the Insurance Fund for Servicemen

Payments have existed since 1 January 2017 for the families of fallen and wounded soldiers. This fund is drawn from the wages of every worker living in the country, which amounts to 1000 dram (slightly more than 2 dollars) from every monthly pay cheque.

According to the fund’s director, Varuzhan Avetikyan, this year’s fund is equivalent to 60 million dollars. It will be distributed to the families of those fallen, wounded, and missing in action.

Each family will receive 52 to 82 million dram (120-160 thousand dollars). However, the compensation will be paid out in two stages. First the families of those fallen, maimed in the first degree, or missing in action will receive a total of 10 million dram (20 thousand dollars), while the families of those maimed in the second degree will receive 5 million dram (10 thousand dollars).

«Thereafter those families will receive a monthly payment of 100-300 thousand dram (200-600 dollars). If the serviceman has three or more children, the family will receive an additional 100 thousand dram (200 dollars)”, said Avetikyan.

According to him, in just the last three weeks the fund receive additional donations totalling 4.5 million dram (9 thousand dollars), 80% of which came from the residents of Armenia.