By Armen Zakarian
The Armenian government will make every effort to collect 53 billion drams ($95 million) in taxes in the fourth quarter of the year, Minister of State Revenues Yervand Zakharian said on Saturday.
The revenue target, set by the International Monetary Fund, is the main precondition for the release of the second $15 million tranche of the World Bank’s Structural Adjustment Credit (SAC-4). The $50 million loan is designed to cover nearly half of Armenia’s budget deficit.
“We hope that the task of collecting 53 billion drams in the fourth quarter will be successfully accomplished and the second SAC tranche will be disbursed,” Zakharian told RFE/RL in an interview.
The IMF target came after a shortfall in the government’s third-quarter tax revenues. The Armenian tax authorities collected 38 billion drams in revenues or 17 percent less than is projected by the 2001 budget.
Zakharian blamed the shortfall on the country’s energy sector which failed to meet its tax obligations amid rising financial losses. He said the sector’s fourth-quarter performance is crucial for the success of the tax collection effort.
President Robert Kocharian last month harshly criticized the country’s top energy officials, saying that they put “positive tendencies” in the Armenian economy at risk. Kocharian slammed the energy ministry for its failure to end the “disproportionately high losses” and the poor oversight of “financial flows.”
But Zakharian cautioned that even if Armenia’s power generation and distribution companies pay the required 12.5 billion drams to the state treasury before January, the government will still fall short of meeting its annual 173.3 billion-dram revenue target. The authorities will at best secure 170 billion drams, he said.
Zakharian also assured that despite the existing fiscal problems the government is able to increase its revenues by 12 percent next year as is envisaged by its draft budget for 2002. He said the ministry for state revenues has drafted a package of amendments in Armenia’s tax legislation which would make it more difficult for private businesses to evade taxes.