ARMENIAN TAX REVENUES UP IN 2007

The Armenian government successfully implemented its record-high budget for last year by ensuring a more than 31 percent increase in its tax revenues, Finance and Economy Minister Vartan Khachatrian said on Thursday. According to official statistics cited by Khachatrian, the government collected 505.5 billion drams ($1.65 billion) in various taxes and customs duties, compared with 385.1 billion drams collected in 2006. Its tax revenue target for 2007 had been set at about 459 billion drams. Khachatrian said the State Tax Service (STS) and the State Customs Committee exceeded that target thanks to their more efficient work and continuing robust economic growth which the government says made up 13.8 percent in 2007. “Thus, sufficient grounds are in place to continue effective macroeconomic management and concentrate on sustaining steady medium-term growth, reducing unemployment and managing inflation,” he told a news conference. The tax revenues also rose as a share of Gross Domestic Product from 14.5 percent to 16.1 percent between 2006 and 2007. But with tax evasion remaining widespread in Armenia, the proportion is still one of the lowest in the former Soviet Union. Many local companies, especially large and lucrative ones, continue to underreport their earnings, owing to their owners’ strong government connections. The government’s stated crackdowns on tax fraud have so far primarily targeted small and medium-sized firms. Many of them say they are being arbitrarily forced to pay higher taxes, a claim that was denied by the STS chief, Vahram Barseghian, on Wednesday. The government plans to achieve a similar increase in tax revenues this year in accordance with Armenia’s 2008 state budget which calls for government expenditure to reach a new high of 820.8 billion drams ($2.67 billion). (Photolur photo)
By Hovannes Shoghikian

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