The Armenian government is embarking on a sweeping overhaul of its tax collection body in an effort to improve tax administration in the country, a senior lawmaker said Friday.
Gagik Minasian, chairman of the Armenian parliament committee on finance and budgetary affairs, made clear at the same time that the authorities are not considering high-level personnel changes within the State Revenue Committee (SRC).
Prime Minister Tigran Sarkisian publicly lambasted the controversial head of the SRC, Gagik Khachatrian, on April 15 as he continued to decry widespread tax evasion among Armenia’s largest and most lucrative businesses. The criticism was a further sign of his dissatisfaction with Khachatrian. The latter has long faced corruption allegations from opposition politicians, media and some businessmen pointing to his extensive business interests.
Minasian downplayed the public bashing of the SRC chief, saying that such criticisms are “a natural process that takes place periodically.” He said the government therefore has no intention to sack Khachatrian or other top tax officials. “I find such discussions inadmissible, and if there is criticism it doesn’t mean what you are talking about,” he told journalists.
The pro-government lawmaker, who is also member of a government task force working on tax reforms, said the authorities are instead planning other “large-scale changes” aimed at ending harassment of businesses by tax officials. They should translate into a “softer” taxation regime for small and medium-sized enterprises, he said.
“The amount of their [physical] contacts with tax officials should sharply decrease,” Minasian explained. That means controversial tax raids on SMEs and inspections of their books will become less frequent and more “targeted,” he said.
Sarkisian denounced the SRC for more than doubling the number of such inspections last year. He said the agency thus acted against his government’s strategy of improving the investment climate in Armenia.
Opposition representatives, meanwhile, scoffed at the harsh criticism as well as the latest government pledge to reform tax administration. “There is no need to look for scapegoats,” Artsvik Minasian of the Armenian Revolutionary Federation (Dashnaktsutyun) told RFE/RL. “I think the government’s and prime minister key objective is to conduct a PR stunt.”
Another opposition economist, Vahagn Khachatrian of the Armenian National Congress, likewise alleged that the government is “simply staging yet another theater show.” He said the government leaders are disinterested in creating a level playing for all businesses because of their own close involvement in economic activity.
“Will the prime minister shrink the money in his pocket? Will Serzh Sarkisian agree to see his revenues shrink?” he told RFE/RL. “Will the oligarchs surrounding them agree to forgo their revenues? I don’t think so.”