Sarkisian Explains Tax Overhaul

YEREVAN (RFE/RL)–President Serzh Sarkisian launched a blistering attack on the leadership of Armenia’s State Tax Service (STS) on Thursday as he explained his decision to merge the agency with the State Customs Committee (SCC).

Sarkisian said he decided to incorporate the two agencies into the newly formed State Revenue Committee because the STS has been performing “extremely badly.” He referred to an August 1 meeting during which he gave the STS chief, Vahram Barseghian, and other top tax officials one month to achieve a marked improvement in the collection of taxes.

A statement by the presidential press service quoted Sarkisian as saying that during the past 20 days the STS leaders have not only failed to improve their performance but have shown no “desire to affect change.”

"I haven’t seen that they go to work to provide services to the state and business,” he said. “I haven’t seen the effort, the energy, the desire to work.”

“This is a case where surgical intervention is indispensable,” he added, according to the statement.

The overhaul of Armenia’s tax and customs services came despite an almost 35 percent rise in state revenues reported by the government in the first half of this year. The bulk of the gain resulted from a 46 percent surge in proceeds from collection of value-added tax (VAT). Most of VAT was levied by the customs from imported goods.

That might explain why the head of the SCC, Gagik Khachatrian, rather than Barseghian, was named to run the State Revenue Committee. Sarkisian harshly criticized Barseghian, a figure close to his predecessor Robert Kocharian, as he introduced Khachatrian to the new agency’s staff.

The Armenian president and his prime minister, Tigran Sarkisian, announced a major crackdown on tax evasion shortly after taking office in April. Earlier this month the government approved a three-year plan of actions designed to tackle the problem. The creation of the State Revenue Committee appears to be also part of the effort.

Analysts cautiously welcomed the structural change. “In my view, the tax and customs service must operate in tandem and within the same structure,” said Tatul Manaserian, an independent economist and former parliamentarian. “A lot needs to be done to achieve a full synergy between them.”

“Such structural changes have been personalized in the past,” Manaserian told RFE/RL. “Two agencies would be merged for the sake of one individual. I want to believe that there is serious concern behind this change.”

Vigen Sargsian, a spokesman for the Yerevan office of the World Bank, said, “The government has serious reform programs in the tax and customs spheres, and let’s hope that the latest structural change will serve its purpose.”


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