YEREVAN (RFE/RL)–The deepening economic crisis around the world has so far had no adverse impact on improving tax collection in Armenia, Finance Minister Tigran Davtian said on Wednesday.
According to the Finance Ministry, the Armenian government’s aggregate tax and customs revenues rose by 26.3 percent to 496 billion drams ($1.63 billion) in the first ten months of this year. The increase mainly resulted from a 32.6 percent surge in proceeds from value-added tax (TAX), the single largest source of budgetary revenue in the country.
“The collection of taxes is proceeding according to plan,” said Davtian. “The economic crisis has not affected tax collection in Armenia as yet.”
The government has to ensure a further 20 percent rise in tax revenues if it is to successfully execute its budget for next year that was approved by parliament last week. The budget envisages that total government expenditures will grow by 13.3 percent to 945 billion drams in 2009.
Davtian appeared confident that the tax authorities will meet the record-high revenue target as a result of continued economic growth and improved tax administration. The government hopes that a 40 percent jump in the salaries of tax and customs officials, effective from January, will also serve that purpose.
However, the global crisis may seriously complicate the government’s fiscal performance. The recent plunge in international prices for non-ferrous metals, Armenia’s number one export item, is already hitting the local mining and metallurgy industries hard. Hundreds of employees of Armenian mining companies have been laid off or sent on leave in the past two months.
The largest of those companies, the German-owned Zangezur Copper and Molybdenum Plant, has long been one of the country’s leading corporate taxpayers. Its chief executive, Maxim Hakobian, told RFE/RL on Wednesday that Zangezur’s contributions to the state budget will likely drop by at least 20 percent in 2009.