By Atom Markarian
Armenian tax authorities reported on Tuesday an almost 23 percent increase in the amount of taxes collected by them in the first quarter of this year, putting the government on track to meet its 2006 budgetary targets. Felix Tsolakian, head of the State Taxation Service (STS), told President Robert Kocharian that his agency’s January-March revenues totaled 42.3 billion drams ($94 million).
A statement by Kocharian’s office said that particularly significant has been a rise in proceeds from the collection of corporate and individual income taxes which have long been grossly underreported in Armenia. It cited Tsolakian as saying that STS is currently tracking suspected delinquent companies whose “paid taxes are not commensurate with the scale of their activities.” No details were reported.
The Armenian customs similarly said earlier this month that it has met its first-quarter revenue target. Both the State Customs Committee and STS are under strong pressure to ensure the successful execution of the government’s record-high budget for 2006 which is due to pass the $1 billion mark for the first time in Armenia’s post-Soviet history. It calls for a 22 percent increase in the still modest public spending.
The tax and customs bodies had already boosted their revenues by 22 percent to 304 billion drams last year. The sum is worth only 14.4 percent of Armenia’s 2005 Gross Domestic Product. The proportion is very low even by ex-Soviet standards and highlights the continuing large scale of tax evasion in the country.
One of the ways of combating the practice was supposed to be the mandatory declaration by state officials of their incomes and other assets, which was introduced several years ago. According to Tsolakian’s deputy Armen Alaverdian, as many as 49,000 of them filed income declaration to STS before the April 15 deadline.
Alaverdian admitted that the procedure has made little difference as many of the high-level officials grossly underreport their assets. He complained that Armenia’s law on financial disclosure does not envisage tough sanctions against such individuals.
The problem was also discussed during Kocharian’s meeting with Tsolakian. The presidential statement said Kocharian stressed the need to “further clarify mechanisms” for punishing those officials who file false financial statements.
(Photolur photo: Felix Tsolakian.)