BUSINESSMEN EXPRESS CAUTIOUS OPTIMISM ABOUT CUSTOMS AND TAX REFORMS
NOYAN TAPAN
Ju ne 30
The government has launched reforms of tax and customs services,
and its goal is that these services will create minimal problems for
the business community. This presupposes the definition of simple and
exhaustive requirements and rules, the conduct of a limited number
of efficient checks, and ensuring the transparency of activities. The
work of tax and customs services should compensate for the difficulties
that the Armenian businessman encounters in the region in connection
with relatively high expenses and other obstacles.
As NT correspondent was informed by Narine Mailian, executive director
of the Small and Medium Business Foundation nonprofit organization,
as long ago as March 31, 2008, the consultation held by then prime
minister Serge Sargsian with the participation of representatives of
small and medium business and NGOs initiated the participatory process
of improving the customs and tax legislation and administration. On
the initiative of the RA ministry of economy, meetings were organized
with representatives of big, as well as small and medium business
and organizations representing their interests at the Union of
Manufacturers and Businessmen (Employers) of Armenia and the Small
and Medium Entrepreneurship Development National Center of Armenia
Foundation (SME DNC) in April. Then a number of other meetings took
place, including with the participation of the president.
During the meetings, a number of problems were raised concerning
"businessman-state structures" interrelations, ensuring an
equal competitive environment, and improving the tax and customs
administration and in general, the business environment in the country.
In the opinion of N. Mailian, the Armenian businessmen respond
positively to the measures undertaken by the government. According to
her, as a result of the change made in the customs-house work in the
past month, entrepreneurs have the opportunity to declare themselves
the imported goods. The Customs Code has allowed doing so since 2002,
but until now it has not been used in practice.
The reason was the disagreement between businessmen and customs
officials over the customs value of a commodity, which would be
resolved through "negotiations". The necessity to meet and "negotiate"
with customs officials was removed after the Armenian president
Serge Sargsian had instructed to put the data on the customs values
of goods on the website of the State Customs Service.
In the words of N. Mailian, the entrepreneurs accepted with
satisfaction the new style of the customs-house work but they also
have some fears: is it going to be continuous and may the old working
style resume in a while?
As for the problems of the tax service, N. Mailian said that if
the government succeeds in implementing the planned reforms in the
sector, it will significantly improve the business environment of the
country. Tax sector reforms are more complex. In particular, it is
necessary to make a number of legislative amendments. The problems
identified through discussions have found their reflection in the
drafts "The Seven Major Purposes of Tax Administration in the RA" and
"The Tax Administration Policies in the RA based on the Seven Major
Purposes" which were developed by the State Tax Service adjunct to
the RA government and again presented for public discussion.
The "seven purposes" declared by the State Tax Service in particular
include "the use of "soft administration" with respect to small
entrepreneurship".
In the opinion of N. Mailian, the imperfect system of classification
of small and medium entrepreneurship may become a serious obstacle
to the current reforms. In Armenia, enterprises are classified as
small, medium or big by the number of employees, without taking their
turnover volumes into account. According to this classification,
80% of Armenian industrial enterprises are either "very small" or
"small". Therefore, the use of "soft" administration in practice will
be greatly conditioned by the introduction of a more subtle system
of enterprise classification.
Nevertheless, as N. Mailian said, the businessmen are optimistic about
the expected reforms. One pledge of this optimism is that prior to
taking certain steps, the government carefully discusses these steps
with the business community.
From: Emil Lazarian | Ararat NewsPress
