YEREVAN, March 17. / ARKA /. The executive director of the Union of Information Technology Enterprises (UITE), Karen Vardanyan, has once again slammed the government today for enforcement of mandatory funded pension system arguing it would not work in this country and saying also if the government persists in efforts to ignore popular protests against the new pension scheme it would see a ‘Maidan’.
"In the past all negative economic processes affected people indirectly. This is the first time when the government ‘picks’ the pockets of people. If it continues to insist on this reform, sooner or later it will have a Maidan in Yerevan,,” Vardanyan said at a press conference on Monday.
According to him, the authorities are unable to adequately perceive the public outrage, demonstrated by ‘cynical statements’ of the ministries of finance and social and labor issues and the central bank.
Armenia’s Constitutional Court suspended last month Article 76 of the new law, which provides for penalties for failed or delayed pension tax payments, and the third paragraph of Article 86, which obligates employed citizens to choose a pension fund, among other parts of the law. The Court says it will conclude the inquiry on March 28, 2014.
The constitutionality of the law was challenged by three opposition parties in the National Assembly — the Armenian National Congress, the Armenian Revolutionary Federation, and the Heritage Party — along with the usually pro-government Prosperous Armenia Party.
The new pension system requires that all Armenian citizens born after 1973 pay social security taxes equivalent to 5 percent of their monthly wages, which will be matched and doubled by the government. That money has to be deposited with private pension funds licensed by the government late last December.
Asked whether a package of draft legal amendments approved by the government last week that would exempt newly established IT firms employing up to 15 people from profit tax for three years and offer also preferential income tax rate for their employees, could reduce the protests of young people from IT companies against the pension reform, Vardanyan said the draft law is for start-ups, while the reform applies to well-established and successful firms.
The chairman of the Union of Domestic Producers, Vazgen Safarian, said that the new pension scheme could be effective only it is not mandatory. -0-