Armenian Church in Tax Relief Controversy

A proposal to exempt the Armenian national church from land and property tax has worried many opposition politicians and angered members of other faith groups, who say it discriminates against them.

A bill currently before parliament would grant a series of tax exemptions to the ancient Armenian Apostolic Church. The law was approved in a first reading in October, signalling broad approval for the plan, which its supporters say would free up more of the church's resources for charitable work among the poor.

Armenians are the world's oldest Christian nation, and there are Armenian Apostolic churches all across the country.

Opponents of the bill point out that the church's assets include residential properties, a cinema, a shop, a park, an artificial lake, a football stadium and more. They are asking why such a large landowner should be freed from tax obligations.

"When the law is passed, the church [as a non-taxpayer] will not be a participant in Armenia's economic development," Artsvik Minasyan, a member of parliament from the opposition Dashnaktsutyun party, said. "Yet surely the state's principal obligation is to involve the church as much as possible in the process of economic growth."

Vardan Bostanjyan of the Prosperous Armenia party fears that the exemption will starve already impoverished local government institutions of revenue.

Church representatives said the proposed law would bring the state's legislation into line with that of many other countries, including Muslim ones, where the Armenian church is exempt from taxes.

They point out that during the 70 years of Soviet rule, the church lost much of its property and has still not managed to regain its former prosperity.

Bishop Arshak Khachatryan, chancellor of the Echmiadzin Holy See, the seat of the Catholicos of All Armenians, said the institution's assets included 140 new churches built since the country became independent 1991, plus associated properties fulfilling essential functions.

"There are free cafeterias for the poor in these places, children's centres, residential houses… used by priests, and also Lake Nersisyan, which lies within the territory of the Mother See of Echmiadzin," he said.

Bishop Khachatryan said the taxes paid on these properties were miniscule, so government would not suffer from their loss.

"The Church of Saint Gregory the Illuminator [Echmiadzin's cathedral] pays annual property taxes of 60,000 drams [155 US dollars]," he said. "On average, churches… pay property taxes in the region of 20,000 drams plus land tax."

Some of those criticising the bill acknowledge that the sums involve make tax exemption largely symbolic, but warn that it could set a precedent that other faith groups might want to follow.

Minasyan said that awarding special privileges to the Armenian Apostolic Church could mean "forgetting that the constitution and our international obligations also requires us to ensure the rights of other religious organisations".

Bishop Khachatryan rejected that argument, pointing out that many western states had an established church, but also upheld the freedom of other religious communities.

Religious minorities in Armenia are against granting an exemption to the Apostolic Church. The Armenian Evangelical Baptist Christian Church, a Protestant group, and the Armenian Catholic Church, which is in communion with the Vatican, have both demanded that the law be expanded to cover them, too.

"Why does there need to be discrimination?" Father Grigor Mkrtchyan, a Catholic priest in Gyumri, asked. "That means the rights of Catholic worshippers, of whom we have around 150,000, are not respected. We spend 1.9 million euro on charitable activities every year, but we still have to pay tax and duties."

Father Grigor asked, "How are government officials going to explain why a restaurant complex built within the grounds of the [Apostolic Church] Kecharis Monastery is to be freed from paying taxes, whereas the children's refuge in the Poghosyan educational institution belonging to the Catholic Church, which performs the state's job of helping orphans and children from poor families in Gyumri, has to pay tax?"

Bishop Khachatryan said parliament had been presented with a list of specific properties that would not pay tax, and the restaurant near the Kecharis monastery would not be among them. The list could be amended further, he added.

"The church does not own villas. It has decrepit old houses where priests live. The church has no business concerns," he said.

He said the church currently spent one-third of its funds on educational work, and the more tax it had to pay, less money it had for charity programmes.