LAW OF THE REPUBLIC OF ARMENIA

of November 12, 2016 No. ZR-202

About financial equalization

Accepted by National Assembly of the Republic of Armenia on October 20, 2016

Article 1. Subject of regulation of the Law

1. This Law establishes concept, the principles of financial equalization, procedure of payments and distributions of the grants (further - grants) to local authority budgets provided by the principle of financial equalization.

Article 2. The basic concepts used in the Law

1. In this Law the following basic concepts are used:

1) financial equalization - reducing difference between financial opportunities of municipalities for contribution to harmonious development of municipalities, and also creations of opportunity to make expenses in the minimum quantity in all municipalities for accomplishment by local government bodies of the obligations assigned to them by the law;

2) coefficient of budget providing municipality - ratio of the regulating yield ratios and account requirements of municipality;

3) yield ratio of municipality - profitability ratio per capita municipality so to similar indicator of the Republic of Armenia;

4) profitable capability of community - tax amount on real estate, the property tax of vehicles, the deducted taxes, the state fees and grants provided according to part "an" of the law, fixed by the law and provided within this Law;

5) the regulating coefficient of account requirements - the amount of the account factors established by this Law which influences expenses of municipality on implementation of the powers by it;

6) factors of expenses - the factor which is characterizing features of municipality and having influence on implementation of the powers assigned to municipalities by the law. This Law includes the following factors of expenses:

1) large-scale coefficient;

2) coefficient of availability of transport;

3) coefficient of degree of vysokogornost of municipality;

4) the number of the settlements included in municipality;

5) factor of age structure of the population;

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