A German-owned mining company has almost tripled its financial contributions to the state budget and become Armenia’s largest corporate taxpayer thanks to increased international prices of base metals.
Data from the State Revenue Committee (SRC) released on Tuesday shows the Zangezur Copper and Molybdenum Combine (ZCMC) paying over 15 billion drams ($40.8 million) in various taxes and duties the first half of this year, compared with 5.5 billion drams paid in the year-earlier period.
The surge is the result of a strong rally in the prices of non-ferrous metals -- and molybdenum in particular -- in the world markets that plummeted during the 2009 global recession.
Armenia’s export-oriented mining and metallurgical enterprises have strongly benefited from this recovery. The National Statistical Service (NSS) has reported double-digit gains in their output this year.
First-half exports of metal ores and ore concentrates were up by as much as 52 percent at $204 million. Armenian companies also exported $191 million worth of base metals, a year-on-year rise of 21 percent.
This in turn has reflected positively on the country’s overall macroeconomic performance. According to government projections, its economic growth will accelerate to around 5 percent in 2011.
The ZCMC, which is based in the southeastern town of Karajan and mostly owned by the German metals group Cronimet, occupied fifth place in the list of the country’s leading taxpayers in 2010. It was topped by ArmRosGazprom (ARG), the Russian-controlled national gas distribution company.
With first-half tax contributions totaling 12.7 billion drams, ARG is second in the latest taxpayer rankings now topped by the mining giant. It is followed by the Alex-Grig company of government-linked tycoon Samvel Aleksanian, which controls lucrative imports of wheat and other basic foodstuffs. The tax and customs authorities collected 8.2 billion from the company in January-June.
Also among the leading taxpayers are Armenia’s three mobile phone operators, largest fuel importing and tobacco firms, the national electricity utility and the Metsamor nuclear plant.
The government’s overall tax revenues rose by 10 percent to 314.8 billion drams in the first half. Armenia’s 1,000 largest companies accounted for almost three-quarters of this sum.
“Tax revenues are definitely growing faster than the economy,” Samvel Avagian, an independent economist, told RFE/RL’s Armenian service. “But it would be premature to conclude that the economic situation has improved considerably.”
The government claims to have significantly toughened its crackdown on widespread tax evasion in recent months.