ARMENIA SHOULD CONTINUE REFORMS IN FISCAL SECTOR
Noyan Tapan
Jun 16 2006
YEREVAn, JUNE 16, NOYAN TAPAN. Maintaing the current rates of poverty
reduction and economic growth in Armenia requires a continuous prudent
macroeconomic policy. The IMF Deputy Director for the Near East and
Central Asia Julian Berengaut stated this during the parliamentary
hearings "Armenia-IMF: Development through Cooperation" on June 16.
According to him, the state should continue reforms in the fiscal
sector so that more revenues can be collected in an transparent
and fair way (the taxes/GDP ratio of 14.4% in Armenia in 2005 was
lower than in most CIS countries) and based on it, infrastructure
and social service development programs can be implemented without an
increase in the level of inflation. J. Berengaut said that tax reforms
should be especially aimed at abolishing the system of privileges for
foreign investors and reducing the shadow sector through improved
administration, which will promote development of the country’s
financial sector.
In the opinion of the IMF representative, the financial sector should
play a greater role in Armenia’s economy, accumulating the savings of
population and making investments in the economy, which is a guarantee
of higher economic growth.
Responding to questions of RA National Assembly deputies and the
event participants, he noted that the Central Bank of Armenia (CBA)
should follow suit of the countries whose central banks set both the
upper and lower limits of inflation. He expressed an opinion that the
CBA’s strategies of "floating" exchange rate and inflation targeting
are correct.
In his view, the Armenian government is successfully reducing the
budget defecit year after year, at the same time maintaining a high
economic growth, whereas in many Eastern European countries with
a lower rate of economic growth, a lot of effort is made to reduce
the deficit.
The RA National Assembly Speaker Tigran Torosian attached special
importance to cooperation with international financial structures,
particularly with the IMF, underlining that it has no mandatory
character and has been of great use for solution of the complex
macroeconomic problems facing Armenia. Since 2004, the IMF has
allocated 350 mln USD to Armenia. T. Torosian expressed a hope that
the RA National Assembly deputies and IMF representatives will have
regular meetings.
RA Deputy Minister of Finance and Economy Suren Gharayan and the CBA
Board member Vatche Gabrielian spoke about the positive experience
that Armenia has gained from cooperation with the IMF in developing
the tax budgetary and monetary credit sectors. S. Gharayan said that
IMF’s advisory assistance was conducive to the fact that in 2005,
the ratio of direct taxes to GDP grew by 39.6% compared with 2004,
while the ratio of total tax revenues to GDP grew by 10% in Armenia.
From: Emil Lazarian | Ararat NewsPress
