By Armen Zakarian
A domestic tobacco manufacturer is Armenia’s single largest corporate taxpayer, bringing approximately 12 billion drams ($20.7 million) to the state budget each year, official sources said on Friday.
Samvel Petrosian, a senior official at the State Taxation Service, told RFE/RL that the Grand Tobacco firm, registered as a Armenian-Canadian joint venture, tops the list of Armenia’s 356 biggest companies that provide more than half of the government’s tax revenues.
Those business entities are officially considered “large taxpayers.” Their operations are overseen by a special division inside the government’s main tax collection agency which is headed by Petrosian. He declined to disclose the amount of various taxes paid by Grand Tobacco on the grounds that it could be interpreted by the public as an “advertisement.”
But other government sources said the company pays about 1 billion drams in taxes every month. Most of that comes from excise and value-added duties levied from every pack of cigarettes sold in Armenia. Grand Tobacco, which accounts for more than 40 percent of domestic cigarette sales, is part of the Grand Holding group owned by Hrant Vartanian, a businessman with close ties to President Robert Kocharian.
Grand Tobacco is followed by the ArmenTel telecommunications monopoly and several producers of alcoholic drinks, including the French-owned Yerevan Brandy Company. ArmenTel is said to pay 700 million drams in monthly taxes.
The large taxpayers’ unit was set up early this year at the urging of the International Monetary Fund which argued that the tax authorities will thereby deal more effectively with the companies that provide between 55 percent and 60 percent of the government’s overall tax revenues. The latter are projected to total 104 billion drams this year.
Petrosian said the re-structuring has already paid off, pointing to a roughly 20 percent increase in tax revenues expected in 2002. The government plans to boost them further by more than 10 percent next year.