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Russian-Owned Gas Firm Armenia's Top Taxpayer

The flags of the ARG national gas operator and its dominant Russian shareholder, Gazprom (file photo)

The flags of the ARG national gas operator and its dominant Russian shareholder, Gazprom (file photo)

YEREVAN -- The Russian-dominated natural-gas distribution company ArmRosGazprom remains Armenia's top corporate taxpayer according to official rankings, RFE/RL's Armenian Service reports.

ArmRosGazprom (ARG) paid more than 10 billion drams ($27 million) in various taxes and duties in the first half of this year.

ARG increased its tax contributions by roughly 13 percent year-on-year and tops the latest taxpayer rankings released by the State Revenue Committee on July 27, despite a significant fall in gas consumption in Armenia.

"That is mainly conditioned by the recent increase in gas tariffs, as a result of which our value-added tax contributions have increased," company spokewoman Shushan Sardarian told RFE/RL.

Earlier this year, state regulators allowed ARG to increase its gas price for households by 37.5 percent because of the increased cost of Russian gas imports. The gas price for corporate consumers was raised by 17 percent.

Gas consumption in Armenia fell by 20 percent last year.

Yet despite incurring serious losses, the company ended up at the top of the 2009 taxpayer list. It was previously topped by K-Telecom, another Russian-owned company that runs Armenia's largest mobile-phone network.

K-Telecom is only fourth in the Revenue Committee's 2010 rankings, with almost 7.3 billion drams paid in the first half of the year. It was surpassed by rival telecom operator ArmenTel and the Aleks-Grig company, which controls large-scale imports of basic foodstuffs.

Armenia's top 10 taxpayers also comprise companies importing fuel and cigarettes, the country's largest metallurgical enterprise, the national power utility, and a tobacco factory. The Revenue Committee data shows that the total amount of taxes paid by them was up 22 percent from the first half of 2009.

The Flash company, Armenia's largest fuel importer, was fifth on the list, paying only 7.4 million drams ($20,000) in profit and payroll taxes in the first half of 2010. City Petrol Group, its main rival which boasts the largest national network of gas stations, paid less than half that amount.

Flash deputy director Mushegh Elchian claimed both companies are barely making any profits at the moment.

"Since competition has tightened, we now work without profits," he told RFE/RL.