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Armenian Tax Chief Skeptical About 2012 Budget

Gagik Khachatrian, head of the State Revenue Committee
Gagik Khachatrian, head of the State Revenue Committee
YEREVAN -- The head of Armenia's State Revenue Committee is concerned by a more than 13 percent increase in tax revenues envisaged in the government's 2012 draft budget, RFE/RL's Armenian Service reports.

Gagik Khachatrian insisted in an interview with RFE/RL on October 18 that the SRC will have trouble collecting 101 billion drams ($270 million) in additional taxes, duties, and social-security payments unless the government specifies which sources they will come from.

The budget drafted by the Finance Ministry late last month would raise public spending by about 5 percent to 1.05 trillion drams ($2.8 billion) in 2012. It calls for a total of 910 billion drams in tax and other budgetary revenue.

Khachatrian openly described the tax revenue target as unrealistic when the spending bill was approved by Prime Minister Tigran Sarkisian's cabinet on September 29. But Sarkisian dismissed Khachatrian's objections, saying the SRC can meet the target by improving tax collection and cracking down on the economy's informal sector.

"I just pointed out that they should show the areas of economic development from where those revenues can be expected so that we...can enter 2012 well prepared and know how much in revenues to collect and from which sectors," Khachatrian told RFE/RL. "Unless there is such a document, the risks will certainly grow."

Khachatrian indicated that his concerns have still not been addressed. He did not comment on a package of fresh amendments to the tax law that the government plans to push through parliament later this year.

Sarkisian discussed the draft amendments with the leadership of Armenia's largest business association last week. He said that if passed they will translate into higher tax revenues.

The tax package has not yet been made public.

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