Armenia lost 4 billion drams ($8.3 million) in projected tax revenue in the first quarter of this year due to an economic downturn in Russia and other members of the Eurasian Economic Union (EEU), a senior official said on Tuesday.
Armen Alaverdian, a deputy head of the State Revenue Committee (SRC), referred to proceeds from uniform import duties that are collected by the EEU member states and then distributed among them on the basis of fixed quotas. In his words, Armenia received 11 billion drams in such revenue, down from 15 billion drams that had been anticipated by its government.
“There were fewer allocations [to Armenia] from the common EEU fund because Russia’s, Kazakhstan’s and Belarus’s imports were down compared with the same period last year and so were customs revenues from them. We therefore didn’t get as much as we had planned,” Alaverdian told the Armenian parliament’s committee on economic affairs.
Alaverdian singled out on the sharp depreciation of the Russian ruble resulting from a collapse of oil prices as the main factor behind the revenue shortfall. “Nobody could imagine such fluctuations of the [exchange rate of the] Russian ruble,” he said.
With oil prices beginning to rally in January, the Russian currency has strengthened by nearly 20 percent against the U.S. dollar since the beginning of this year.
Alaverdian stressed the importance of this “elements of stabilization” for Armenia’s economy and budgetary revenue. “Nothing keeps us from expecting that Russia’s economic indicators will improve in the second half of this year and next year and will live up to our expectations,” he said, presenting a first-quarter tax report to lawmakers.
Accordingly, the official dismissed suggestions that the shortfall is further proof that membership in the Russian-led trade bloc cannot be beneficial for Armenia. “The amount of customs revenue alone cannot determine whether or not we should be part of this union,” he said. “If the ruble remains stable our exports to Russia will definitely grow.”
According to official statistics, Armenia’s exports to Russia more than doubled in January-March 2016 after shrinking by almost 27 percent last year because of the ruble depreciation.
Armenia mostly exports agricultural products, prepared foodstuffs, brandy and wine to Russia. The National Statistical Service has reported significant first-quarter increases in export revenue from these products.