The head of the State Revenue Committee (SRC) on Tuesday claimed to have made considerable progress in tackling widespread tax evasion in Armenia, pointing to a sizable increase in the government’s tax revenue.
“We can note that there has been an increase in tax revenues in the last eight or nine months,” Vartan Harutiunian told reporters after speaking at parliamentary hearings in Yerevan. “This testifies to the successful performance of the SRC.”
The SRC collected 255 billion drams ($530 million) in taxes and customs duties in the first quarter of this year, a year-on-year increase of 10.5 percent. The government agency attributed the increase to a tougher fight against corporate tax evasion and ongoing reforms of tax administration.
Citing improved tax collection, the Armenian government said in April that it hopes to spend roughly 50 billion drams ($103 million) more than expected this year. The planned extra spending would be equivalent to about 4 percent of overall expenditures envisaged by Armenia’s 2017 state budget.
Harutiunian insisted that the SRC’s declared fight against tax evasion is targeting all companies, including those belonging to wealthy businesspeople close to the government. But he declined to name any major firm forced to stop underreporting their earnings.
“Any economic entity may make mistakes,” he said. “Those mistakes are detected and rectified as a result of inspections. That leads to money paid to the state budget in the form of fines.”
“If people have paid up and rectified their mistakes, why do you want to sling mud at them?” added the official.
The so-called “oligarchs” have long been suspected of enjoying privileged treatment by tax authorities. Many of them also have also enjoyed a de facto monopoly on some lucrative forms of business, notably imports of fuel and key foodstuffs.
A figure close to Prime Minister Karen Karapetian, Harutiunian was appointed as SRC chief in October. He said in December that he plans to remove “corrupt and unhealthy elements” from the SRC.
Harutiunian announced on Tuesday that as many as 483 tax and customs officials have been laid off in recent months. “In the era of new technologies, it’s only natural that the human factor becomes less important,” he said of the staff cuts.
Karapetian spoke in February of “fundamental” changes planned within Armenia’s tax and customs services making up the SRC. Corruption among tax and customs officials has long been endemic.