Macroeconomy

 

New Armenian government received $1 billion worth investment proposals
/Sept 3/ARKA/

YEREVAN – The new government of Armenia has received one billion USD worth investment proposals, Economic Development and Investments Minister Artsvik Minasyan said at a press conference on Monday.
He said investors’ interest in Armenia began to surge from May. He added that after assessing real indicators, the government has singled out the most realistic investment proposals worth $240 million.
“Now we are working with these investors so that their ideas are transformed into business plans or business initiatives to achieve concrete results,” Minasyan said. 
The minister also singled out Armenia’s ‘unprecedented’ economic growth of 8.3% in the first six months of this year, the highest over the last eight years.
According to him, trade and services grew by 9.5%, contributing  5.3 pp GDP growth; construction sector grew by 8.9%, (0.5 pp GDP growth). The industry grew by 6.8% (1.4 pp GDP growth), agriculture – by 5.8% (0.5 pp GDP growth).  Also the added value of net taxes grew by 8.7% (1pp GDP growth).
‘Armenia’s economic activity in January-July  grew by 9.3% with industrial output growing by 4.3%, year-on-year,  agricultural output growing by 4.6%, construction – by 10% , 4%, goods turnover by 8.9%, and services by 18.7%,” Minasyan said.
 

Armenia’s overall public debt grows to about $6.8 billion
/Sept 3/ARKA/

YEREVAN – At the end of July, 2018 Armenia’s overall public debt stood at $6.759 billion, having increased by $54.79 million from the previous month, the National Statistical Committee (NSS) reported.
It said the country’s external public debt was $5.456.9 billion, an increase of $7.76 million month-on-month.
Of that amount about $4.880.3 billion were owed by the government (an increase of $1.158 million), and another $576.669 million were owed by the Central Bank (an increase of $6.602 million).
Armenia’s domestic debt at the end of July 2018 amounted to $1.302 billion, an increase of $47.034 million from the previous month. About $1.148.2 billion were owed to resident holders of government bonds, also $144 million were owed to holders of government bonds in foreign currency and $9 million were government-provided guarantees.


Armenia needs to effect large-scale reforms to maximize EEU’s potential
/Sept 3/ARKA/

YEREVAN – Armenia needs to effect large-scale reforms in order to maximize the available potential of the Eurasian Economic Union (EEU), Economic Development and Investments Minister Artsvik Minasyan told a news conference today.
He said Armenia uses very little the opportunities stemming from its membership in the EEU and the main task is to maximize their use to become a real bridge for the EEU and the European Union member and other countries.
In his words, “today Armenia is the best example in the region of how to combine two different trade regimes,” Minasyan said.
He said there is a huge potential that needs to be used, but this requires large-scale infrastructure reforms, up to changing trade policies in cooperation with EEU, EU, China, Iran, the Middle East and the USA.
The minister called also for revising the Institution of Trade Representatives of Armenia abroad, who should attract real investments into the country and ensure sale of Armenian goods and services outside it.
According to him, this also implies cooperation with other countries, in which there are obstacles for Armenian investors. As an example, he noted the Armenian company ArmTab, which produces high-tech products, but for almost two years has been unable to enter the Russian market because of the requirements of mandatory registration and administrative procedures.
 

Armenian government commission to assess extent of country’s shadow economy
/Sept 3/JAM News/

The next task for the commission will be to create a strategy to combat the shadow economy

The Armenian government has created a commission in order to assess the size of the country’s shadow economy.

Experts will study around 20 different industries, after which the State Revenue Committee will come up with a strategy to incorporate these sectors into the country’s body of tax-paying subjects and legal entities.

The Armenian authorities currently have difficulty in assessing the extent of the country’s shadow economy.

“It’s impossible to assess the scale [of it] in just two months. This is the first time that such a project will be carried out,” said David Ananyan, the head of the State Revenue Committee of Armenia.

However, some economists have put forward several theories on how much money the state treasury loses per year because of the shadow economy. Economist Hrant Mikaelyan says that 30 per cent of the nation’s GDP consists of economic transactions carried out within the shadow economy. This could account for some USD 2.6 billion per year.

“This is of course less than at the beginning of the 2000s when the shadow economy accounted for 80 per cent of all trade transactions. However, this indicator is still very high. Next on the list will most likely be service providers and construction companies.”

Hrant Mikaelan says that in developed countries such as Denmark, this indicator falls to between four and eight per cent. In the US it is about 10 per cent, while in Belgium it accounts for 16-18 per cent of trade transactions. In developing countries, this indicator can be anywhere between 15 and 70 per cent.

Mikaelan says that results could take a while as it will initially be difficult to ‘expose’ the activities of the current shadow economy.

“The lower the percentage, the harder it is to fight the shadow economy. A GDP of 24 per cent would be a positive result for Armenia. Later, the administrative costs of this ‘fight’ will exceed the income received. We can’t go after every grandmother who doesn’t pay her taxes.”
 

Rise in imports tariffs sparks protests in Armenian capital
/Sept 3/Panorama/

A group of traders selling clothing in retail markets in Yerevan, Armenia’s capital, are rallying outside the government building to protest against the increased customs clearance fees.

The protesters demand the authorities to review the imports tariffs, which have increased to $4-5 from the previous $3, claiming the small and medium-sized businesses are facing serious problems due to the move. 

One of the protesters stressed traders manage to sell only half of their imported goods, while the other half remains unsold, with the majority of people having loans to pay off. “After all, people are in charge of the power. People should decide whether to increase or reduce the fees,” he stressed.

Chairman of the Solidarity NGO Armen Nersissyan, who joined today the protesting traders, said on Sunday he held a meeting with Deputy Chairman of the State Revenue Committee Rafik Mashadyan to discuss the issue.

“We have decided to stand still here to meet with Prime Minister Nikol Pashinyan. We want to have the prices cut down; people have ended up in a complex situation,” he said, reflecting on a recent decision of Minister of Education and Science Arayik Harutyunyan allowing schoolstudents to wear free clothing instead of the former black and white uniforms, due to which traders are unable to sell them. 


Singapore tax system “miracle” can be applied in Armenia?
/Sept 10/News.am/

YEREVAN. – If someone asks me whether the Singapore “miracle” in terms of tax system can be applied in Armenia, I will definitely say no.

Chairman of the State Revenue Committee of Armenia, Davit Ananyan, who recently visited Singapore, stated the abovementioned at a press conference on Monday.

“[First,] the willingness to pay taxes is considered a very important event [in Singapore], from the viewpoint of national security; [but] unless we [Armenia] privatize it, we will not be able to apply their system [at us],” he explained, in particular. “Second, if they [Singapore] have formed an ideology that paying taxes is an element of patriotism from the viewpoint of national security, then the [Armenian] tax authority is obligated to form such a presumption within itself.

“[But] we have a presumption that any taxpayer has a wish to avoid paying taxes in any way. (…). We have a culture coming from the USSR that deceiving the state, stealing from the state is events worthy of respect.”


Major changes to be made to Armenian tax code before the end of the year
/Sept 10/ARKA/

YEREVAN – The head of Armenia’s State Revenue Committee David Ananyan presented today a package of major changes to be made to the Tax Code of the country before the end of this year.
Speaking at a news conference he said the proposed changes include reduction of income (payroll) and profit taxes, as  promised last week  by Prime Minister Pashinyan, as well as reduction in the number of  alternative taxation systems, which are now five (self-employed, family entrepreneurship, businesses entitled to preferential tax, entities paying  turnover tax, and those who are taxed under the general tax system). Ananyan said instead of the 5 taxation systems there will be 3.
Ananyan said also a change in the ideology of the turnover tax will be made. He explained that the companies operating under the current system will have to pay at least the same amount of taxes as those entities that are taxed under the general taxation system.
He said another planned change in the tax code is removing items and provisions that may have different interpretations. According to Ananyan, the proposed changes are endorsed by the Ministry of Finance.
Prime Minister of Armenia Nikol Pashinyan earlier this month announced changes in the Tax Code of the country and presented two possible options for reforming income taxation system, also promising that the tax rates will be declining annually.


Administrative offenders in Armenia may be granted 50% discount
/Sept 10/ARKA/

YEREVAN – The Armenian parliament is discussing a set of changes to the Code of Administrative Offenses, which would allow citizens, who commit administrative offenses, to pay the half of the imposed fine if they pay it in due time.
An MP Mihran Poghosyan, who proposed the changes, told his fellow lawmakers that  the changes if approved would  ease  the social burden and simplify procedures for payment of fines for administrative offences. He said if the fine is paid within the 8-day period as stipulated by the draft law, it will be halved.
He added that the proposed changes will not apply to citizens who commit offenses with serious consequences, such as driving in a state of intoxication, violations in the manufacturing of baby food and the use of medicines.
According to him, as a rule, most fines are not paid in due time, making government bodies take the cases to courts, which in turn send them to the Enforcement Service for further action.
Poghosyan said it is necessary to make citizens understand that they would benefit from the timely payment of administrative fines, which would also reduce the burden on courts and the Enforcement Service.
On July 12, the Armenian parliament approved a draft law providing for amnesty for a number of fines for violation of traffic rules. As a result, about 150 thousand Armenian drivers were forgiven fines for breach of traffic rules worth 13.7 billion drams ($28.4 million).

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