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Armenian Finance Minister Downplays Rising Tax Revenue

Armenian Finance Minister Vache Gabrielian
Armenian Finance Minister Vache Gabrielian
YEREVAN -- Armenian Finance Minister Vache Gabrielian has downplayed a more than 13 percent rise in the tax revenues, saying more needs to be done to improve tax collection in the country, RFE/RL's Armenian Service reports.

According Finance Ministry data, the State Revenue Committee (SRC) collected more than 591 billion drams ($1.62 billion) in various taxes and duties last year, up from 522.4 billion drams in 2009. The figure also represents a 3.8 percent increase over the tax revenue target set in the state budget for 2010.

But Gabrielian told journalists on January 24 that tax evasion in Armenia remains widespread despite repeated government crackdowns.

The state budget for this year calls for 650 billion drams in tax revenue. Gabrielian, who was the deputy governor of the Central Bank before being appointed as finance minister last month, cautioned that tax revenue will still be equivalent to only 17 percent of Gross Domestic Product -- one of the lowest ratios among former Soviet republics.

Prime Minister Tigran Sarkisian regularly describes improved tax administration as a top government priority, having pushed through parliament numerous changes in tax legislation. The most recent legal amendments approved by the National Assembly last month envisage a major simplification of the country's notoriously cumbersome taxation requirements and procedures.

Both the World Bank and the International Monetary Fund regard genuine tax reform as well as an improvement of the overall business environment as essential for Armenia's sustainable economic development.

The World Bank considers mining one of the undertaxed sectors of Armenia's economy. The bank indicated earlier this month that the authorities are ready to enact a special "mining code" that would remedy the situation.

Gabrielian did not confirm this, saying that ongoing "discussions will show" whether there is a need for such a code. "We will [soon] express our final position on the issue," he said.