Armenian Government’s Tax Revenues Continues to Grow Rapidly

YEREVAN — The Armenian government’s tax revenues continued to grow rapidly in the first quarter of this year, the head of the State Revenue Committee (SRC), Davit Ananian, said on Wednesday.

Ananian said that the SRC collected 296.5 billion drams ($610 million) in various taxes and customs duties, up by almost 24 percent year on year. The government agency comprising the national tax and customs services thus exceeded its first-quarter revenue target by 4 percent, he stressed.

The government’s tax revenues already soared by over 14 percent, to 1.3 trillion drams ($2.7 billion), last year. It was project to reach 1.4 trillion drams in 2019.

Prime Minister Nikol Pashinyan promised last week that the SRC will surpass that target by 40 billion drams. The extra revenue will allow the government to raise the salaries of schoolteachers and military personnel by 10 percent and repair more than 300 kilometers of roads, he said.

Ananian reaffirmed that pledge at a news conference in Yerevan. He said the first-quarter surge in budgetary revenue was primarily driven by proceeds from the 20 percent value-added tax (VAT) collected from imported and domestically manufactured goods and services.

SRC data released by Ananian shows a sharp rise in cash receipts issued in January-March 2019by Armenian retailers and other small businesses paying VAT. Their combined monetary value was up by 17.4 percent year on year.

Pashinyan regularly urges Armenians to demand such receipts when buying goods and services to prevent businesses from evading VAT and other taxes. He says that this is essential for the success of an “economic revolution” promised by him.

Pashinyan’s government pledged to crack down on widespread tax fraud when it took office in May. Over the next two months alone the SRC recovered more than 20 billion drams in unpaid taxes from 73 companies.

Armenian tax revenue rose by more than 7 percent in 2017. Ananian acknowledged in May that his predecessor, Vartan Harutiunian, combated the informal sector of the Armenian economy “quite effectively.” But he said the fight against tax evasion will be tougher and “even more effective” during his tenure.

The SRC also reported on Wednesday a more than threefold increase in appeals that were filed by companies protesting against fines imposed on by them by tax officials. More than half of those financial penalties were overturned by a special SRC body.