GAGIK MINASIAN AND KHACHATUR SUKIASIAN POSITIVELY ASSESS TAX POLICY CONDUCTED BY STATE

Noyan Tapan
Jun 12 2007

YEREVAN, JUNE 12, NOYAN TAPAN. Solution of the problems related
to reduction of the shadow economy and income polarization will be
continued under the Poverty Reduction Strategy Paper of the Armenian
government. Chairman of the RA National Assembly Standing Committee
of Financial, Credit and Budgetary Issues, RPA member Gagik Minasian
stated this during the June 12 discussion with NA deputy, Sil Concern’s
founder Khachatur Sukiasian.

Responding to NT correspondent’s question about what steps the
government can take in this direction, G. Minasian said that
reduction of income polarization is no so much social as political
problem. According to him, the poverty index is currently below 30%
in Armenia, while extreme poverty index is declining faster than
poverty index. In terms of poverty reduction, G. Minasian attached
special importance to solving the problem of unequal development of
Yerevan and marzes.

He noted that the shadow economy is declining as well: in the first
5 months of 2007, the growth of GDP/taxes ratio exceeded by 1.2%
(instead of the envisaged annual 0.4%) the index of the same period of
lst year. Besides, the 2007 state budget envisages that tax revenues
should grow by 27% against 9% GDP growth.

In the opinion of K. Sukiasian, improvement of tax administration in
the last 5-6 years rather than use of the "attacking" method by the
tax service with respect to economic entities has made it possible
to register such indices of tax collection.

He said that by its tax policy, the state promotes the progress of
certain sectors with a potential for development. In particular,
in the construction sector, taxation is not yet done depending on
the zone where the residential building (whose apartment is sold)
is located. K. Sukiasian expressed confidence thah as regards the
sale of apartments by urban developers, taxation should be done in
the form of fixed payments calculated by zones rather than in the
form of value added tax (VAT), which will facilitate their taxation
by the tax service.