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Armenian Tax Agency Vows To Meet 2012 Revenue Target


Armenia - Armen Alaverdian, deputy of the State Revenue Committee, at a news conference, 18Jan2012.

Armenia - Armen Alaverdian, deputy of the State Revenue Committee, at a news conference, 18Jan2012.

After repeated misgivings voiced about the Armenian state budget for this year, the State Revenue Committee (SRC) effectively promised on Wednesday to ensure a 13 percent rise in tax revenues projected by the government.

Armen Alaverdian, the deputy head of the tax collection agency, said that SRC officials are holding meetings with Armenia’s leading corporate taxpayers for that purpose. He said they are being warned against underreporting their earnings.

“We are primarily meeting with large taxpayers, the ones that essentially carry the bulk of the tax burden and bear responsibility for ensuring budgetary revenues,” Alaverdian told a news conference. He referred to between 3,000 and 4,000 companies that account for about 80 percent of taxes, social security payments and other duties collected by the SRC.

“We will raise most of the [extra] revenues at the expense of those taxpayers,” said Alaverdian.

Under the government’s 2012 budget, the SRC is to collect 874.4 billion drams ($2.3 billion) this year. This will be essential for the success of government plans to increase its expenditures by 4 percent and at the same time cut the budget deficit to a level equivalent to 3.1 percent of GDP.

The SRC chief, Gagik Khachatrian, repeatedly described the revenue target as unrealistic late last year. Prime Minister Sarkisian and Finance Minster Vache Gabrielian dismissed Khachatrian’s objections.

Alaverdian himself warned on December 16 that the SRC will have trouble ensuring the revenue increase if economic growth in Armenia falls short of a 4.2 percent rate forecast by the authorities. The official voiced no such concerns on Wednesday.

Alaverdian also announced that in its drive to boost budgetary revenues SRC will generally avoid targeting small businesses despite suspecting many of them of tax evasion. He specifically referred to entities that report an annual business turnover of less than 58.4 million drams ($151,000) which allows them not to pay a 20 percent value-added tax (VAT).

“We see some risks there among those economic entities that clearly do no want to disclose their [real] turnover to us, mainly do business in cash and are connected with medium-sized or big businesses,” said Alaverdian. Nevertheless, added the official, the government has instructed the SRC to inspect only some 2,380 large and medium-sized enterprise in the course of this year.
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