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Armenian Government Drafts New Bill To Combat Tax Fraud


Armenia - Prime Minister Tigran Sarkisian and members of the Union of Industrialists and Entrepreneurs discuss fresh changes in tax legislation, 12Oct2011.

Armenia - Prime Minister Tigran Sarkisian and members of the Union of Industrialists and Entrepreneurs discuss fresh changes in tax legislation, 12Oct2011.

The Armenian government is planning fresh changes in tax legislation in an effort to shrink the informal sector of the domestic economy and thus boost its budgetary revenues, Prime Minister Tigran Sarkisian said on Wednesday.


The government’s press office said Sarkisian discussed with Armenia’s largest business association a “big tax package” that will be submitted to parliament soon. In a statement, it said the proposed amendments to laws regulating taxation are designed to generate additional revenues envisaged by the government’s draft budget for next year.

The budget approved by ministers late last month would raise public spending by about 5 percent to 1.05 trillion drams ($2.8 billion) in 2012. To that end, the State Revenue Committee would have to collect 874.3 billion drams in various taxes and other state duties, a 13 percent increase over this year.

“In order to achieve that objective, we have targeted sectors where we have to detect existing [untapped] revenues,” the statement quoted Sarkisian as telling the leadership of the Union of Industrialists and Entrepreneurs.

“On the one hand, we have to reduce the budget deficit but on the other, not to reduce the expenditures,” he said. “The only way to do that is to collect more taxes. For that purpose we will seek to raise additional revenues that will not hit businesses hard and will at the same time allow us to solve this very important economic issue.”

The statement gave no details of the tax bill which the government will try to push through the National Assembly. Nor did it specify the entrepreneurs’ reaction to the bill. It said only that “relevant proposals” were made during the meeting.

The chairman of the business union, Arsen Ghazarian, agreed earlier this week that reducing the size of the shadow economy is essential for meeting the 2012 revenue target. But he said the government should also finally break up “oligopolies” that control lucrative sectors of the Armenian economy.
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