By Emil Danielyan
President Robert Kocharian warned Armenia’s top tax and customs officials on Wednesday to ensure a more than 20 percent increase in public spending envisaged by the national budget for this year.
Kocharian told the leaderships of the State Taxation Service and the State Customs Committee to address continuing “serious shortcomings” in their work that draw complaints from local businesspeople and are responsible for the modest size of government expenditures in the country.
“In the president’s view, the tax and customs bodies have undoubtedly made progress, but they should not content themselves with that and should try to create a full-fledged and efficient system by taking a few steps forward each year,” Kocharian’s office said in a statement.
The Armenian leader said that while the tax authorities managed to meet the government’s budgetary targets last year, further improvements in their performance will be needed this year. “If you perform poorly we will immediately start accumulating [expenditure] arrears. That is why we attach so much attention to your agencies,” he was quoted as saying.
Kocharian singled out persisting tax evasion in the mining and public transportation sectors as well as large-scale smuggling of various goods to Armenia.
The government’s 2006 budget calls for 482.2 billion drams ($1.1 billion) in expenditures and 412.4 billion drams in revenues. Officials stress the fact that will pass the $1 billion mark for the first time in Armenia’s post-Soviet history.
However, state revenues will still make up less than 17 percent of Gross Domestic Product, one of the lowest indicators in the former Soviet Union. In a research paper released last month, a group of economists from the International Monetary Fund described Armenian tax collection as “disappointing.” They listed increased public spending among the necessary conditions for sustainable economic growth in Armenia.
(Presidential press service photo)