Tuesday, January 23, 2017 Armenian Tax Revenue Up In 2017 . Emil Danielyan Armenia - The headquarters of the State Revenue Committee in Yerevan. Armenia's State Revenue Committee (SRC) reported on Tuesday a more than 7 percent rise in the amount of taxes and customs duties collected by it last year. The increase, which SRC officials have primarily attributed to improved tax collection, helped the Armenian government to cut the state budget deficit. The Finance Ministry reported last week that the deficit shrank from at least 5.2 percent of GDP in 2016 to 3.3 percent in 2017. It said the government's overall budgetary expenditures rose by only 3.8 percent. The extra spending was fully channeled into government-funded capital projects. At 1.16 trillion drams ($2.4 billion), the government's tax revenue was equivalent to almost 21 percent of GDP. The proportion is quite low by international standards, reflecting the scale of tax evasion in Armenia. The tax-to-GDP ratio stood at less than 18 percent in 2012. It rose by 0.5 percentage points last year, the SRC said in a statement. Prime MinisterKaren Karapetian praised the SRC's performance when he met with the leadership of the national tax and customs service on January 15. "You accomplished a lot in 2017 but you still need to accomplish a lot," he said. The current SRC chief, Vartan Harutiunian, is a figure close to Karapetian. Harutiunian has repeatedly pledged to crack down on widespread tax fraud and corruption among tax officials since he was appointed to run the SRC in late 2016. The International Monetary Fund praised the Armenian authorities' "efforts to improve tax administration" already in June 2017. It said that they have"contributed to the higher-than-projected revenue collection." The improvement has been particularly visible in the Armenian customs service, which has long been reputed to be one of the country's most corrupt government agencies. Import duties collected by it soared by over 23 percent in 2017, according to the SRC statement. The tax authorities were also helped by faster economic growth estimated by the Finance Ministry at around 7 percent. Continued growth anticipated by the government should also help the SRC achieve a further sizable increase in tax revenue envisaged by the Armenian state budget for this year. The SRC can also count on additional revenue resulting from new and controversial tax legislation that took effect on January 1. It raised the income tax rates for Armenians earning 280,000 drams ($580) a month and more as well as excise duties collected from alcohol, fuel and tobacco. The new Tax Code has been strongly criticized by opposition groups and economic analysts critical of the government. They say that it will push up key consumer prices and encourage private employers to underreport their workers' wages. Government officials have defended the higher taxes, however, saying that they are needed to boost public spending without increasing Armenia's debt burden. Government On Defensive Over Price Hikes . Tatevik Lazarian Armenia - Senior government officials attend parliamentary hearings in Yerevan, 23Jan2018. Senior government and Central Bank officials downplayed the impact of recent increases in the prices of fuel and some foodstuffs in Armenia during parliamentary hearings held on Tuesday. The leadership of the Armenian parliament organized the hearings at the initiative of President Serzh Sarkisian, who expressed concern over the price hikes earlier this month. Sarkisian discussed their possible causes at an emergency meeting with top state officials. Some of those officials spoke at the hearings attended by not only lawmakers but also representatives of non-governmental organizations and opposition parties not represented in the National Assembly. Just like Prime Minister Karen Karapetian, they insisted that the increased prices of the essential products have not significantly pushed up the cost of living in Armenia. Artur Javadian, the governor of the Central Bank of Armenia, said that consumer price inflation in the country stood averaged only 2.6 percent last year. "In terms of fiscal-monetary policy, inflation is under control," he said, adding that it has been much higher in neighboring Georgia and Azerbaijan. Javadian also complained: "Inflationary expectations seem to be intensifying for unfounded reasons, making the ongoing fiscal-monetary policy more costly. And irrational public behavior stemming from that will hurt the public itself." Nikol Pashinian, an outspoken opposition leader, questioned the official inflation rate, pointing to recent months' double-digit rises in the prices of butter, meat and potatoes which the authorities blame on external factors. "Why did the authorities organize these hearings? To say that there is no inflation in Armenia," said Pashinian. Roland Avetisian, who leads an NGO defending pensioners' rights, also hit out at the government. "Pensioners have a really hard time getting by and meeting their basic needs," he said. The prices of petrol, diesel and pressurized natural gas, used by most vehicles in the country, went up by around 10 percent following the entry into force on January 1 of higher excise taxes. Vakhtang Mirumian, a deputy head of the State Revenue Committee, insisted that these price hikes will not have a serious impact on consumers and businesses. Mirumian argued that gasoline now powers only a small minority of Armenian cars and is practically not used by manufacturing firms. He went on to play down the higher price of pressurized gas, saying that it now equals the gas tariff that existed in 2015. The cost of public transport and other services and goods will not rise as a result, he said. Diesel fuel is used by tractors and other agricultural machinery. Hence, widespread fears that agricultural products grown in Armenia will become more expensive. Agriculture Minister Ignati Arakelian told the hearings that the government may well subsidize the diesel price for villagers and wheat farmers in particular. "A plan of subsidizing diesel fuel is already under discussion," he said. France's Macron Vows Continued Support For Armenia FRANCE -- French President Emmanuel Macron (R) and his Armenian counterpart Serge Sarkisian hold a joint news conference after a meeting at the Elysee Palace in Paris, France will continue to maintain warm relations with Armenia and support it in the international arena, French President Emmanuel Macron said after holding talks with his Armenian counterpart Serzh Sarkisian in Paris on Tuesday. Macron also described as "encouraging" recent Armenian-Azerbaijani peace talks and urged the parties to the Nagorno-Karabakh conflict to "go farther" in trying to resolve it. "France will always be alongside Armenia," he said in a statement to the press made at the presidential Elysee Palace. "France will accompany you in a troubled regional environment so that your country can conquer its future as it has always done in its history," he added. Macron cited "profound links" between the two nations cemented by the existence of a sizable and influential Armenian community in France. "I am also aware of the fight by the Armenian Diaspora in France for the memory of the [1915] genocide and I have deepest respect for this fight," he said. Macron was endorsed by leading French-Armenian organizations ahead of a second round of voting in France's April-May 2017 presidential election. Four ethnic Armenians were subsequently elected to the French parliament on the ticket of his Republic on the Move party. Macron announced after the talks with Sarkisian that he will travel to Armenia in October on a state visit timed to coincide with a summit in Yerevan of Francophonie, a grouping of over 70 mainly French-speaking nations. He expressed hope that the summit will give "new impetus" to the spread of the French language in Armenia. The 40-year-old French leader also stressed the "necessity to impart more dynamism to our economic cooperation." He said he specifically discussed with Sarkisian ways of boosting French investments in the Armenian economy. "I am thinking of sectors such as tourism, renewable energy, agriculture, logistics and retail," he said. France - French President Emmanuel Macron (R) welcomes his Armenian counterpart Serzh Sarkisian before a meeting at the Elysee Palace in Paris, For his part, Sarkisian reaffirmed his administration's commitment to deepen Armenia's "privileged" relationship with France. "We sincerely love and respect France and its talented people," he declared at the joint news briefing. "We have practically identical views on all vital issues # I mean both the bilateral and international agenda. We espouse the same principles and are guided by the same value system," he said. Sarkisian went on to thank France for helping Armenia negotiate and sign in November the Comprehensive and Enhanced Partnership Agreement (CEPA) with the European Union. In Macron's words, the landmark agreement reflects a "special formula" for Armenia-EU ties that was advocated by the French government. The unresolved Karabakh conflict also apparently featured large during the first-ever meeting of the two presidents. France has been spearheading, together with the United States and Russia, international efforts to broker an Armenian-Azerbaijani peace accord. Macron said that a long-awaited peaceful resolution of the conflict requires "courageous decisions and compromises" by both conflicting sides. In that regard, he hailed progress reportedly made during Sarkisian's October 2017 meeting with Azerbaijan's President Ilham Aliyev and follow-up talks between the Armenian and Azerbaijani foreign ministers. "We know how fragile the process still is and how volatile the situation on the ground often is," said Macron. "It is therefore absolutely essential that this renewed dialogue leads to concrete progress." "We will continue to closely monitor this situation and we will take, in concert with our Russian and American partners, any initiative that could advance the settlement process," he added. France's Macron Vows Continued Support For Armenia FRANCE -- French President Emmanuel Macron (R) and his Armenian counterpart Serge Sarkisian hold a joint news conference after a meeting at the Elysee Palace in Paris, France will continue to maintain warm relations with Armenia and support it in the international arena, French President Emmanuel Macron said after holding talks with his Armenian counterpart Serzh Sarkisian in Paris on Tuesday. Macron also described as "encouraging" recent Armenian-Azerbaijani peace talks and urged the parties to the Nagorno-Karabakh conflict to "go farther" in trying to resolve it. "France will always be alongside Armenia," he said in a statement to the press made at the presidential Elysee Palace. "France will accompany you in a troubled regional environment so that your country can conquer its future as it has always done in its history," he added. Macron cited "profound links" between the two nations cemented by the existence of a sizable and influential Armenian community in France. "I am also aware of the fight by the Armenian Diaspora in France for the memory of the [1915] genocide and I have deepest respect for this fight," he said. Macron was endorsed by leading French-Armenian organizations ahead of a second round of voting in France's April-May 2017 presidential election. Four ethnic Armenians were subsequently elected to the French parliament on the ticket of his Republic on the Move party. Macron announced after the talks with Sarkisian that he will travel to Armenia in October on a state visit timed to coincide with a summit in Yerevan of Francophonie, a grouping of over 70 mainly French-speaking nations. He expressed hope that the summit will give "new impetus" to the spread of the French language in Armenia. The 40-year-old French leader also stressed the "necessity to impart more dynamism to our economic cooperation." He said he specifically discussed with Sarkisian ways of boosting French investments in the Armenian economy. "I am thinking of sectors such as tourism, renewable energy, agriculture, logistics and retail," he said. France - French President Emmanuel Macron (R) welcomes his Armenian counterpart Serzh Sarkisian before a meeting at the Elysee Palace in Paris, For his part, Sarkisian reaffirmed his administration's commitment to deepen Armenia's "privileged" relationship with France. "We sincerely love and respect France and its talented people," he declared at the joint news briefing. "We have practically identical views on all vital issues # I mean both the bilateral and international agenda. We espouse the same principles and are guided by the same value system," he said. Sarkisian went on to thank France for helping Armenia negotiate and sign in November the Comprehensive and Enhanced Partnership Agreement (CEPA) with the European Union. In Macron's words, the landmark agreement reflects a "special formula" for Armenia-EU ties that was advocated by the French government. The unresolved Karabakh conflict also apparently featured large during the first-ever meeting of the two presidents. France has been spearheading, together with the United States and Russia, international efforts to broker an Armenian-Azerbaijani peace accord. Macron said that a long-awaited peaceful resolution of the conflict requires "courageous decisions and compromises" by both conflicting sides. In that regard, he hailed progress reportedly made during Sarkisian's October 2017 meeting with Azerbaijan's President Ilham Aliyev and follow-up talks between the Armenian and Azerbaijani foreign ministers. "We know how fragile the process still is and how volatile the situation on the ground often is," said Macron. "It is therefore absolutely essential that this renewed dialogue leads to concrete progress." "We will continue to closely monitor this situation and we will take, in concert with our Russian and American partners, any initiative that could advance the settlement process," he added. Press Review "Haykakan Zhamanak" reports on the continuing increase in fuel prices in Armenia. The paper notes that the same prices remain unchanged in Russia, a country from which Armenia imports the bulk of its petrol and diesel. It also says that higher excise taxes, which went into effect on January 1, alone could not have pushed up the prices of fuel and some food products. "Hraparak" comments on attempts by some of Armenia's major opposition groups to revitalize themselves. The paper points to protests staged or planned by the Yelk alliance, Levon Ter-Petrosian's Armenian National Congress (HAK) and Zaruhi Postanjian's Yerkir Tsirani party. "No other oppositionists seem to be around," it says. "Seyran Ohanian, Vartan Oskanian and Raffi Hovannisian do not even make statements through the media. Zhirayr Sefilian and Andrias Ghukasian are in jail. Paruyr Hayrikian is buoyed by Armenia's agreement with the European Union and has opted for a vow of silence." This leads the paper to conclude that regime change in Armenia could only be the result of government infighting, rather than a popular movement. In an interview with "Zhoghovurd," a Russian commentator, Modest Kolerov, predicts that President Serzh Sarkisian will become prime minister after serving out his final presidential term in April. "Russia has received such signals from Armenia," he claims. "I will be very surprised if Serzh Sarkisian does not become prime minister. That would be tantamount to his resignation and departure from power." Kolerov also insists that Moscow does not regard Prime Minister Karen Karapetian as "Russia's man in Armenia." "Zhamanak" says that government loyalists' claims that Serzh Sarkisian is "irreplaceable" pose a "threat to Armenia's national security." "The problem here is not Serzh Sarkisian but his irreplaceability," explains the paper. "Speaking of anybody's irreplaceability means exposing Armenia's number one target [to its enemies.]" (Tigran Avetisian) Reprinted on ANN/Armenian News with permission from RFE/RL Copyright (c) 2018 Radio Free Europe / Radio Liberty, Inc. 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org