ARMENIA HOPES LOTTERY WILL STAMP OUT TAX EVASION
By Hasmik Lazarian
Reuters
Feb 5 2009
UK
YEREVAN (Reuters) – Armenia is offering thousands of dollars in lottery
prizes to consumers who take receipts for their purchases to try to
tackle rampant tax evasion in the former Soviet republic.
The initiative began on January 1 and the first prizes will be awarded
this month, after authorities said the threat of prosecution had
failed to encourage shopowners and market sellers to install cash
registers and provide receipts.
"It’s no secret that not many people give receipts in Armenia,"
said Armen Alaverdyan, deputy head of the state revenue committee.
Authorities estimate the grey economy accounts for 30-40 percent of
economic activity in Armenia, a landlocked country of 3.2 million
people, in transition since the collapse of the Soviet Union.
Street sellers are everywhere and markets rarely have cash registers.
Under the new scheme, if customers buy from a trader with a cash
register, they stand to win between 5,000 drams (11 pounds) and 500,000
drams. One lucky winner, if the eight-digit number on their receipt
matches that drawn in the monthly lottery, will win 5 million drams
($16,000).
The monthly prize fund amounts to a maximum of $380,000. The government
hopes the lottery will bring in an extra $17 million per year in
tax receipts.
But not everyone is smiling.
"The market sellers don’t want to install cash registers because they
want to avoid paying taxes," said Vahan Kerobyan, chief executive
officer of Star supermarkets.
One market trader in Yerevan, who asked not to be named, said:
"We always pay taxes. If we install cash registers, the amount of
tax will increase, and we’ll need to hire accountants, which will
cost even more."