The Ministry of Finance has proposed amendments to Armenia’s Tax Code, which may create an important mechanism for strengthening the financial sustainability of civil society organisations (CSOs) and media outlets through citizen-based support. The draft proposes including donations made by individuals to non-profit organisations and mass media among reimbursable “social expenditures”, alongside education, healthcare, and housing expenses. If adopted and effectively implemented, the reform could diversify funding sources for civil society and media actors and encourage stronger public accountability and civic participation.
At the same time, the practical impact of the initiative remains difficult to assess at this stage due to the absence of implementing regulations. The draft law leaves open key issues such as reimbursement limits, documentation procedures, and the scope of eligible CSOs and media outlets to by-law regulations. It also remains unclear whether contributions to CSOs and media will be sufficiently incentivised in practice given that taxpayers may prioritise more immediate reimbursable social expenditures such as education, healthcare, and housing costs.
Armenian legislation allows CSOs to seek, receive and use funding from all legitimate sources. However, the domestic funding for CSOs is limited due to several factors, including limited giving culture, underdeveloped capacities for economic activities or soliciting from business, and lack of incentives for individual and corporate donations. Currently, there are no tax benefits for individuals donating to CSOs, while corporate donor benefits are limited.
In the draft amendments presented for public discussion in May 2026, the Ministry of Finance proposes changes to Article 147.1 of Armenia’s Tax Code by including donations made by individuals to non-profit organisations and media outlets among reimbursable "social expenditures”, which currently cover education, healthcare, and housing expenses. This would operate through the universal income declaration system, introduced in Armenia since 2023 and becoming mandatory for all citizens from the 2025 reporting year. At present, citizens may declare their social expenditures through the income declaration system and receive partial reimbursement from the income tax paid. The total reimbursement for education and health expenses currently cannot exceed 100,000 AMD (around 235 EUR) per tax year. With the adoption of the proposed draft, donations to a specified scope of CSOs and media will be treated as reimbursable social expenditures, enabling individuals to receive partial reimbursement from the income taxes paid for the reporting year. It is still unclear whether the reimbursed amount donated to CSOs or media outlets should be counted within the existing limit or provided additionally.
The draft introduces a potential model of citizen-supported domestic philanthropy, allowing individuals to directly support organisations and media platforms they consider socially valuable. By placing donations to CSOs and media alongside social expenditures, the reform also symbolically recognises civil society and independent media as important actors serving the public interest.
New opportunities are accompanied by implementation uncertainty
If implemented transparently and inclusively, the reform could strengthen the financial independence and public accountability of CSOs and media actors in Armenia by encouraging organisations to rely more on citizen trust and participation, and improve their transparency and communication tools.
At the same time, the practical impact of the mechanism remains uncertain. The draft law leaves key issues, including reimbursement limits, eligibility criteria, and technical procedures, to future government regulation, making it difficult to assess how accessible or effective the mechanism will be in practice. Concerns also remain that, if a single overall reimbursement limit applies to all categories of social expenditure, donations to CSOs and media may struggle to compete with more immediate reimbursable expenses such as healthcare, education, and housing costs.
Long-term civil society advocacy lies behind the reform
Financial sustainability has consistently been identified as one of the principal weaknesses of Armenian civil society, and strengthening domestic resource mobilisation for CSOs has been part of Armenia’s civil society agenda for many years. CSO Meter Armenia country reports and other sectoral assessments consistently highlighted the gaps in the tax legislation related to limited incentives for philanthropy and domestic giving.
Over the past two years, the issue has been actively advanced by an advocacy coalition of around 30 CSOs coordinated by NGO Center Civil Society Development NGO. The research conducted by the NGO Center with the support of the European Center for Not-for-Profit Law Stichting (ECNL) identified structural gaps in Armenia’s philanthropy and fundraising environment and concluded that existing tax regulations are not sufficient to encourage local giving or sustainable fundraising mechanisms. Building on an earlier policy paper, which analyses the needs and provides recommendations for charity reforms in Armenia, and with the support of European Center for Not-for-Profit Law Stichting (ECNL) and CSO Meter, they have been specifically advocating for the expansion of incentives for charitable giving to enhance alternative financing opportunities for CSOs.
Further engagement is needed to ensure the reform’s adoption and effective implementation
The draft amendments represent a potentially important step towards improving the enabling environment for civil society and independent media in Armenia through domestic resource mobilisation. The proposed mechanism could become more than a technical tax reform: for many civil society actors, it represents an opportunity to strengthen local giving, enhance citizen engagement with the non-profit sector, and support a more sustainable and publicly accountable civil society in Armenia.
While the initiative signals growing recognition of the role of CSOs and media in democratic development, its long-term significance will depend on the forthcoming by-law regulations and the extent to which the mechanism remains accessible, inclusive, and free from discriminatory limitations. Civil society actors are therefore expected to monitor the development of secondary legislation closely to assess whether the reform delivers meaningful opportunities for sustainable and independent financing.