During its session on May 27, 2021, the RA Government approved the draft RA Government Decree submitted by the RA Ministry of Economy on “Making Amendments to the RA Law on the State Budget of 2021 and to the RA Government Decree No.2215-N of December 30, 2020”, whereby the draft envisages the process of application of assistance tools provided within the framework of the 1st measure for neutralization of the Coronavirus-induced economic impact.

Within the 1st measure for neutralization of the Coronavirus-induced economic impact, it is envisaged to provide preferential loans to solve the problems and temporary difficulties of borrowers due to the current situation. The assistance is realized by subsidizing interest rates on the preferential loans provided within the framework of the measure. The state budget of 2020 envisages 3.3 billion Armenian drams for implementation of the mentioned processes, which was forecasted taking into account that the number of beneficiaries of the measure will make about 684.

The RA Ministry of Economy conducted an analysis of the number of beneficiaries of the measure, the amount of assistance provided and the interest rates subject to the projected subsidy. Thus, currently the number of beneficiaries of the measure is 918, the volume of provided assistance is about 83 billion Armenian drams. The required subsidized interest rate in 2021 is 5.38 billion Armenian drams. According to this Decree, it is proposed that the amount of 377 million Armenian drams not spent annually by the measure shall be allocated at the expense of free income in the first half of the year.

Adoption of the draft RA Government Decree on “Making addenda to the RA Government Decree No.1148-L of July 2, 2020” was conditioned by the necessity to provide differentiated assistance to enterprises importing seeds and taxed by the value-added tax on importation of seeds within the framework of the state assistance program for promotion of autumn wheat production in the Republic of Armenia.

Within the program framework, an additional 20 Armenian drams per 1kg will be provided to enterprises taxed by the value-added tax on importation of seeds. In connection with the respective Decree’s adoption, the weight of seeds in 2020 imported by suppliers and taxed by VAT on importation of seeds totaled to 1,557.7 tons, whereby the acquisition prices of 1kg of imported seeds were studied to calculate the state budget’s additional expenses within the program. The additional amount subject to compensation is about 31.2 million Armenian drams. As a result, it is expected to improve the efficiency of the program, increase the volumes of import and supply of high-quality autumn wheat seeds in Armenia, and expand wheat sowing areas.