By Atom Markarian
The Armenian government approved on Monday a modest rise in expenditures envisaged by its draft budget for next year, rejecting most of the proposals made by deputies during parliament debates earlier this month.
Ministers agreed to increase state revenues and expenditures by only 3.1 billion drams ($5.5 million), setting them at 217 billion and 260 billion drams respectively. About half of the extra funds would go to finance construction work in the earthquake-stricken northern regions of Armenia.
The parliament is scheduled to vote on the final version of the budget on Thursday. Most deputies are likely to endorse it.
Proposals submitted by various parliament factions and individual lawmakers would lead to a total of 24 billion drams in additional spending. The cabinet of Prime Minister Andranik Markarian argued that its original draft budget already called for an 11 increase in the revenues and it would be unable to meet a considerably higher target.
“In the financial sense, this is a fairly balanced budget, even though there are certainly some risks involved,” Deputy Minister of Finance and Economy Pavel Safarian told reporters after Monday’s cabinet meeting. He admitted that the $390 million revenue target for 2002 is “ambitious” and will not be easy to achieve.
The government pushed through the parliament on December 14 a package of amendments in Armenia’s tax legislation which it hopes will allow to improve tax collection.
However, the International Monetary Fund believes that those changes alone are not enough for the successful implementation of the 2002 budget. The IMF representative in Armenia told RFE/RL last week that the Fund wants the authorities to make it more difficult for businesses to evade taxes and shorten the list of imported goods exempt from value-added tax.