The first deputy head of the State Revenue Committee (SRC) on Thursday commented cautiously on its ability to ensure a sizable increase in tax revenues envisaged by Armenia’s state budget for this year.
Armen Alaverdian revealed that the tax and customs agency has collected a fraction of 101 billion drams ($240 million) in planned extra taxes so far this year.
According to the Armenian government’s 2012 budget, the SRC is to collect a total of 874.4 billion drams this year. This will be essential for the success of government plans to increase 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 collected 323 billion in various taxes and duties in the first five months of this year, a year-on-year rise of around 5 percent. In absolute terms, this increase is equivalent to less than 15 percent of the extra revenues projected by the state budget.
“As a rule we collect more revenues in the second half of a year,” Alaverdian told RFE/RL’s Armenian service (Azatutyun.am). “So as planned, most of the increase will be achieved in the second half of this year and I hope that the tax and customs bodies will succeed in raising the additional 101 billion drams.” Whether or not the SRC can do that will be clear only by the end of the year, he said.
Some analysts doubt that the tax authorities will succeed. “They have to collect 10-12 billion drams in extra taxes every month,” said Armenak Chatinian, an economics commentator for the “Orakarg” daily. “That hasn’t happened [so far.] Just how they will collect those sums remains a big question for me.”
Both Alaverdian and the SRC chief, Gagik Khachatrian, publicly questioned the 2012 revenue target late last year. Prime Minister Sarkisian and Finance Minster Vache Gabrielian dismissed their objections, saying that the SRC can generate more budgetary revenues by improving tax administration.
Alaverdian stood by his view that economic growth, which the government has projected at 4.2 percent in 2012, will be critical for successful tax collection. “The economy and economic growth is the main source of revenue collection,” he said. “Most of the revenue increase should be achieved due to those factors.”