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Reforms to be implemented in tax system of Armenia

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  • Reforms to be implemented in tax system of Armenia

    Reforms to be implemented in tax system of Armenia
    The level of tax collection is not sufficient in Armenia.

    Recently, the State Committee of Revenues published the Analysis of
    Summarized Indices of Large Taxpayers' Monitoring in February 2010.
    Basically, positive indices were recorded for 344 largest taxpayers of
    Armenia; specifically the volume of goods and services imported to
    Armenia totaled AMD 53.4 billion in February 2010 that is 55.1% higher
    as compared with the same period of last year. Meanwhile, the increase
    of this index is conditioned not only by goods' import for commercial
    purposes, but also by import of expensive equipment to Armenia. It had
    a direct impact on customs fees, which amounted to 10.9 billion in
    February 2010 that is 49.9% higher as compared with the same period of
    last year. Besides, the volumes of goods exported by the largest
    taxpayers totaled AMD 19.8 billions in February 2010 that is 9.3bln
    higher as compared with the same period of last year.


    May 1, 2010
    PanARMENIAN.Net -

    According to official data, representatives of large businesses also
    met their obligations to the state budget: the index of paid taxes and
    state duties amounted to AMD 15 billion in February 2010 that is 3.8
    billion higher as compared with the same period of last year. However,
    Prime Minister Tigran Sasrgsyan said during a governmental session
    that, according to 2009 data, the tax collection has decreased, while
    the number of tax inspections has increased, specifically at small and
    medium businesses, which face difficulties in opposing to the pressure
    of tax inspectors. Indexes of 2009 raise concern: the total number of
    inspections by tax bodies increased by 82% in 2009, while the
    additional funds obtained through them decreased by 25%. It should be
    noted that the government's strategy aims to minimize personal
    relations of taxpayers and tax bodies. Factually, our tax inspectors
    are unable to refrain from personal contacts with business
    representatives.

    At the same time, the Prime Minister stated that the conditions of
    business environment have improved, despite numerous shortages. And
    this serves as another stimulus for the economic growth, which totaled
    5.5% by the end of the first quarter. Though the proceeds of Armenia's
    344 large taxpayers from sale of products totaled AMD 143.2 billions
    in February 2010 that is 19.9% higher as compared with the same period
    of last year, a decrease in proceeds of 120 taxpayers was recorded
    during the reported period.

    Armenia's government plans to reduce the budget deficit within several
    years, as it sharply increased during the crisis period, amounting to
    7.7% in GDP structure. To this end, the authorities plan to implement
    reforms in tax administration that will allow bringing the state
    budget deficit to its pre-crisis level - 3%. It should be noted that
    first steps in this direction have been taken. The Armenian parliament
    adopted the Law on Taxes in the final reading, establishing the
    state's responsibility for delays in returning of overpaid taxes to
    taxpayers. Besides, under structural changes in economy, the
    government plans to revise the tax base, as the ratio of taxes/GDP has
    worsened by the end of the first quarter of 2010 as compared with the
    same period of last year. Meanwhile, additional funds will be
    attracted to promote the economy. And the private sector will shoulder
    the major part of the state debt service.

    The country's government will face serious difficulties in achieving
    these goals, as the current level of tax collection is insufficient,
    thus, serious measures shall be undertaken to improve it, as well as
    to facilitate the efficiency of the State Committee of Revenues.


    Victoria Araratyan / PanARMENIAN News
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