By Atom Markarian
A senior government official reported on Wednesday a major increase in the Armenian government’s revenues from corporate income tax, attributing it to the recent toughening of penalties for tax evasion.
Armen Alaverdian, deputy chief of the State Taxation Service, told RFE/RL that his agency collected about 6 billion drams ($10.7 million) in profit taxes or 30 percent more than was planned for the first quarter of this year. He said that was the result of a controversial law that imposes a 1 percent turnover tax on all businesses that claim to operate at a loss.
The law, opposed by some representatives of big business, was passed by the Armenian parliament last December and took effect on April 1. Its official purpose is to tackle the widespread underreporting of operational revenues by large and medium-sized Armenian companies.
In 2001 they reported a suspiciously high aggregate loss of 56 billion drams. The figure shot up to over 200 billion drams ($357 million) last year, despite a record-high rate of economic growth registered by the government. And despite an overall sizable increase in state revenues, the tax authorities failed to meet their 2003 profit tax target of 22 billion drams.