By Armen Zakarian
Armenian lawmakers began debating on Wednesday the government’s draft budget for next year which aims to bring the deficit down to 3.6 percent of GDP through a sizable increase in tax revenues.
The budget proposed by the cabinet of Prime Minister Andranik Markarian envisages 257 billion drams ($460 million) in expenditures and 214 billion drams in revenues. The resulting deficit of 43 billion drams represents a 22 percent decrease from this year’s level.
The government hopes to narrow the fiscal gap by increasing its revenues by over ten percent. Public expenditures are projected to grow by only 3.5 percent.
The government also wants to sharply reduce its dependence on deficit-funding loans from the World Bank. Finance and Economy Minister Vartan Khachatrian said the bank’s Structural Adjustment Credit (SAC) for next yet will amount to $20 million, far less than the previous SAC loans.
The authorities say the growth in tax revenues will be ensured by continued economic growth and tougher measures against tax evasion. The finance ministry has forecast that GDP growth will be at least six percent and consumer price inflation three percent in 2002. A package of amendments in the existing tax legislation, also debated by the parliament, is pegged to the successful implementation of the budget. One of the proposed changes involves heavier fines on businesses underreporting their earnings to the tax authorities.
Khachatrian said the main budget indicators have been approved by the International Monetary Fund and the World Bank, Armenia’s main creditors. It is expected that the government will make only slight changes in order to push its budget through the National Assembly. The majority of deputies is likely to approve the bill by the end of this month.
Armenian lawmakers began debating on Wednesday the government’s draft budget for next year which aims to bring the deficit down to 3.6 percent of GDP through a sizable increase in tax revenues.
The budget proposed by the cabinet of Prime Minister Andranik Markarian envisages 257 billion drams ($460 million) in expenditures and 214 billion drams in revenues. The resulting deficit of 43 billion drams represents a 22 percent decrease from this year’s level.
The government hopes to narrow the fiscal gap by increasing its revenues by over ten percent. Public expenditures are projected to grow by only 3.5 percent.
The government also wants to sharply reduce its dependence on deficit-funding loans from the World Bank. Finance and Economy Minister Vartan Khachatrian said the bank’s Structural Adjustment Credit (SAC) for next yet will amount to $20 million, far less than the previous SAC loans.
The authorities say the growth in tax revenues will be ensured by continued economic growth and tougher measures against tax evasion. The finance ministry has forecast that GDP growth will be at least six percent and consumer price inflation three percent in 2002. A package of amendments in the existing tax legislation, also debated by the parliament, is pegged to the successful implementation of the budget. One of the proposed changes involves heavier fines on businesses underreporting their earnings to the tax authorities.
Khachatrian said the main budget indicators have been approved by the International Monetary Fund and the World Bank, Armenia’s main creditors. It is expected that the government will make only slight changes in order to push its budget through the National Assembly. The majority of deputies is likely to approve the bill by the end of this month.