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Armenian Businesses Warned Against Tax Evasion


Armenia - Prime Minister Karen Karapetian holds a cabinet meeting in Yerevan, 15Sep2016.

Armenia - Prime Minister Karen Karapetian holds a cabinet meeting in Yerevan, 15Sep2016.

Prime Minister Karen Karapetian on Wednesday reiterated his pledges to significantly improve the investment climate in Armenia, while warning businesses against evading taxes.

“If we don’t tackle the informal sector [of the economy,] this country won’t become a [prosperous] country no matter what we do,” Karapetian told leading members of Armenia’s largest business association at a meeting held in Yerevan. All entrepreneurs benefiting from that sector must become “honest taxpayers,” he said.

Karapetian already ordered Armenian tax authorities to tackle possible tax evasion among large and lucrative companies which he said are in a “privileged” position on September 15, two days after his appointment as prime minister.

Addressing the parliament on September 14, the new premier promised “systemic changes” that will improve what he called a “very grave” economic situation in the country. He said his cabinet will put in place “maximally favorable conditions” for law-abiding businesses.

Karapetian gave similar assurances to the leadership of the Armenia Union of Industrialists and Entrepreneurs (AUIE) at the meeting which focused on ways of improving the business environment. “We have set the following objective: to radically change treatment of entrepreneurs,” he said, according to a government statement. “We will strive to show that we are your partners. We are ready to regularly respond to all issues raised by you.”

In particular, Karapetian went on, the new government is now considering introducing tax breaks for several types of manufacturing business that do not exist in Armenia at present. The premier also urged business leaders to come up with their own proposals relating to the business environment.

According to the government statement, the AUIE’s chairman, Arsen Ghazarian, voiced several such proposals on behalf of businesspeople affiliated with his union. The statement did not elaborate.

The main official rationale for President Serzh Sarkisian’s decision to name Karapetian prime minister is to speed up economic reforms. Sarkisian said on September 8 that Karapetian has agreed to “lead a great wave of changes” that will address popular disaffection with the socioeconomic situation in the country.

Karapetian has lived and worked in Russia for the last five years, managing local subsidiaries of Russia’s Gazprom energy giant. He ran Armenia’s Gazprom-controlled gas distribution network before serving as mayor of Yerevan from 2010-2011.

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