Ignoring strong objections from its finance minister, the Armenian government nearly tripled on Thursday the total amount of bonuses which will be paid to tax and customs officials this year.
The government originally planned to spend 833 million drams ($1.7 million) for this purpose. Prime Minister Nikol Pashinian said the sum should be raised to 2.33 billion drams to discourage corruption in the State Revenue Committee (SRC) and reward its employees for better-than-expected tax collection.
“We have to understand what we are dealing with,” he told a cabinet meeting in Yerevan. “A customs officer who processes tens and sometimes even hundreds of millions drams worth of goods each day gets a [monthly] salary of 160,000 drams.”
Pashinian said that the modest salary, which is below the current national average of 172, 000 drams ($355), tempts them to take bribes and engage in other corrupt practices. He also argued that the SRC, which comprises the Armenian tax and customs services, exceeded its revenue target in the first quarter of 2019 by 11.4 billion drams.
Finance Minister Atom Janjughazian openly objected to the measure, sparking a bitter verbal exchange with the SRC chief, Davit Ananian.
Janjughazian said that the sharp rise in government funding for bonuses would make the SRC “the most equal among equals” in the government. He also downplayed the SRC’s first-quarter performance, saying that “in theory” it could have collected even more taxes given continuing economic growth in the country.
“In theory, we can say anything,” countered Ananian. “For example, we can say in theory that we have messed up the management of public finances.”
Pashinian insisted on the proposed “interim solution,” while admitting that Janjughazian has a point. He promised to seek “more institutional and deep solutions” to the sensitive issue of extra pay for government officials and civil servants.
The prime minister also argued that the sum in question will still pale in comparison with 6 billion drams in bonuses which the SRC’s leadership and other employees received last year.
The disclosure by Armenian media of hefty bonuses paid to tax officials as well as the employees of other government agencies caused opposition uproar late last year. Ananian was forced to admit in January that he alone received 14 million drams ($29,000) in bonuses during his eight-month tenure.
Pashinian essentially defended those payments, arguing that they also benefited ordinary public sector employees, notably school teachers. He also complained that the government has trouble attracting skilled professionals working for private firms because government salaries are too low.