Government Claims Progress In Fight Against Tax Evasion

The State Revenue Committee (SRC) claimed to be successfully combatting widespread tax evasion in Armenia on Wednesday as it reported a nearly 10 percent increase in various taxes collected in the first nine months of this year.

Vartan Harutiunian, the SRC chief, attributed the extra tax revenue of 74 billion drams ($155 million) to faster economic growth and a tougher crackdown on businesses underreporting their earnings. He has repeatedly promised such a crackdown since being named to run the Armenian government’s tax and customs services a year ago.

Harutiunian declined to name any wealthy entrepreneurs or large companies that have been forced to pay more taxes. “I and our agency are doing our job and not engaging in cheap PR,” he told a news conference.

SRC data released this summer showed that companies controlled by Samvel Aleksanian, one of the country’s richest men close to the government, nearly doubled their tax payments in the first half of 2017. Most of them import sugar, other basic foodstuffs and some medicines to Armenia. Aleksanian has long enjoyed a de facto monopoly on those lucrative imports.

Critics have accused him of using his government connections to ward off competition and evade taxes. The tycoon has denied that.

According to the National Statistical Service (NSS), total imports of goods and commodities to Armenia soared by 26 percent to almost $2.5 billion in January-August 2017

Harutiunian, who is a figure close to Prime Minister Karen Karapetian, did not deny that large business entities are targeted in the SRC’s stated crackdown. “We are fighting against that every day,” he said. “And the results of that [fight] are visible in terms of budgetary revenue indicators for both this year and next year.”

Armenia’s draft state budget for 2018 approved by the government last week calls for 1.31 trillion drams ($2.74 billion) in taxes and other state revenue, up by 8 percent from the 2017 revenue target. The government is planning a corresponding rise in its expenditures that would be mainly channeled into infrastructure projects and national defense.

Harutiunian also said on Wednesday that the SRC has simplified customs administration. He said this is one of the reasons for double-digit rises in Armenian exports and imports recorded this year.