Markarian Deman’s Further Tax Collection

YEREVAN (RFE/RL)–Armenia’s tax authorities were on Wednesday given a difficult task of ensuring a month-on-month increase in budget revenues for the rest of the year after announcing a record-high amount of taxes and customs duties collected in July.

Official statistics show that the Armenian Ministry for State Revenues garnered 15.3 billion drams (28.4 million) worth of various taxes last month–which is 13.5 percent more than was expected. The figures are good news for the government of Prime Minister Andranik Markarian as it struggles to meet its budget targets for this year.

Markarian visited the ministry to "thank" its personnel for the improved performance widely attributed to a tougher line on tax evaders. "There must be no restricted areas for the taxation and customs bodies," he said–repeating his cabinet’s pledge to reduce the vast informal sector of the economy.

"I can say that there will be no tax evaders in this country," Gagik Poghosian–the minister for state revenues–agreed. But Poghosian turned visibly edgy as he heard Finance and Economy Minister Levon Barkhudarian say that the revenues have to grow by 15 percent each month if a successful execution of the budget 2000 is to be achieved. Markarian threw his weight behind Barkhudarian’s remark–putting additional pressure on tax officials.

Despite its strong performance in July–the ministry for state revenues has so far collected only 45 percent of $320 million in projected taxes. The shortfall–coupled with the continuing delay with the release of further deficit-funding loans from the World Bank–has already led to serious wage arrears in the public sector. The government acknowledged last May that the shortfall could reach as much as $85 million if the situation does not improve in the coming months.

Last week’s approval by the Armenian parliament of government plans to privatize the country’s energy distribution networks paved the way for the disbursement of the badly needed World Bank funds. Markarian said on Wednesday that the tax authorities should widen their crackdown on "the shadow economy" and ruled out any increase in the existing tax rates. He also said that the government will later this year create "new sources of taxation" by launching number of construction projects worth "tens of millions of dollars"

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