By Ruzanna Khachatrian
After two years of heavy lobbying, the Armenian government succeeded in pushing through parliament on Friday a bill which obligates well-off citizens to regularly disclose their incomes and other assets to tax authorities.
The bill, which is aimed at addressing widespread tax evasion, was unanimously passed by the National Assembly in the final reading after undergoing some changes. The government agreed in particular to raise the annual threshold for financial disclosure to 8 million drams ($19,000).
The original version of the draft law would make income and property declaration mandatory for those Armenians who earn at least 6 million drams a year, or roughly ten times the official average salary in the country. It was rejected by the parliament as recently as on May 31 after strong objections voiced by members of former speaker Artur Baghdasarian’s Orinats Yerkir party and other, mainly wealthy lawmakers.
Senior officials from Armenia’s State Taxation Service (STS) say the law, which will come into force in April 2008, will make it more difficult for affluent people to underreport their revenues and evade taxes. President Robert Kocharian’s former anti-corruption aide, Bagrat Yesayan, has also strongly advocated its adoption, saying that the measure would enable the authorities to uncover expensive property which is owned by corrupt government officials but is formally registered in their relatives’ names.
Armenia already has a law on financial disclosure that only applies to the president of the republic, all members of the parliament, ministers and other senior government officials. But the law has proved largely meaningless, with most senior officials grossly understating their assets in annual income declarations filed with STS. The latter has no right to check the veracity of those statements.