ARMENIA TAKES FURTHER STEPS WITH TAX REFORM
by Natalia Leshchenko

World Markets Research Centre
Global Insight
August 26, 2008

Both the government and the parliament have recently made contributions
to the ongoing effort to reform Armenia’s tax system. The legislature
has approved a package of amendments to a dozen of law related to tax
collection, scrapping, among others, the exemption from VAT and other
taxes for the small retail traders in non-agricultural sector. The
government, in the meantime, had merged the State Tax Service (STS)
and the State Customs Committee (SCC), with a view to streamlining tax
collection. President Sargsyan severely criticised the tax body, headed
by Vahram Barseghian, a close associate of his predecessor Robert
Kocharian. The newly created body, called the State Revenue Committee,
will be headed by former customs committee chief, Gagik Khachatrian.

Significance:The Armenian government is on a mission to reduce tax
evasion in the country, and is pursuing a three-year programme for
the purpose, targeting both corruption in the collection bodies and
improving tax-payer discipline in a two-pronged policy. While many
small traders protested against the removal of tax preferences, these
are likely to stay in place. Radio Liberty reports that Armenia’s
revenues grew by nearly 35% in the first half of 2008, the bulk of
which derived from the collection of VAT, mostly by customs office on
imported goods. The creation of one instead of two bodies responsible
for dues collection is theoretically logical, if the restructuring
itself is accomplished in good time.

From: Emil Lazarian | Ararat NewsPress