SRC chairman reports on system reforms, 2017 tax revenue collection performance and priorities for 2018

During the working meeting with President Serzh Sargsyan, State Revenue Committee (SRC) Chairman Vardan Harutyunyan reported on the reforms implemented in the system of tax administration, aimed at increasing the GDP-taxes ratio, improving the business environment, creating favorable conditions for investment and ensuring increased transparency.

The SRC Chairman introduced the priorities for 2018, the activities and the results expected from the new Tax Code of the Republic of Armenia which came into force on January 1, 2018. Vardan Harutyunyan advised that in order to ensure the targeting of inspections, the risk criteria had been revised; moreover, the number of targeted checks is down by 25%. He noted that the newly commissioned monitoring center allowed the Committee to implement online monitoring of taxpayers’ activities.

Vardan Harutyunyan informed the President that 3117 operational investigations were carried out in 2017 resulting in 3 billion drams additional budget receipts. Criminal proceedings were completed, owing to which 8.5 billion drams were redeemed, 4.6 billion drams or 85.3% more than in 2016.

Coming to the legislative reforms, the SRC Chairman singled out the initiative to exempt from VAT the imports of machinery, equipment and raw materials. Vardan Harutyunyan stressed that 2000 self-employed persons were exempted from taxes, while other taxpayers will be relieved from fines and penalties in case of self-adjustment of calculations. He stressed that the VAT amounts were returned to exporters in just 4 days and without further study - on the basis of applications for up to 20 million drams.

Vardan Harutyunyan also reported back the results of work on developing the capabilities of the electronic control system. He stressed that in the course of 2017 about 97% of taxpayers submitted their tax returns online. In addition, there are opportunities for online viewing of tax liabilities. He advised that a single system of treasury account has already been launched. Thanks to the system of electronic processing of customs receipts and declarations, customs clearance is now being implemented through state-of-the-art information technologies.

Presenting the organizational changes in the system of SRC, Vardan Harutyunyan advised that the tax inspectorates and customs houses had been reorganized into standalone departments in the structure of State Revenue Committee. With reference to the programs planned for 2018, Mr Harutyunyan stressed the expansion of the monitoring center that will result in more targeted inspections. The SRC Chairman also introduced the “blue path” scheme of customs control, as a result of which the goods will be controlled at the post-clearance stage.

Vardan Harutyunyan assured that taxpayers will have the opportunity to submit customs declarations via the Internet without leaving the office. He dwelt on anti-corruption measures and the ways of improving the internal security system and, taking the opportunity, briefed the President on the progress in the implementation of Meghri Checkpoint Modernization Program.

The Head of State told him to continue work on ensuring the proposed level of budget revenues without creating impediments for the activities of economic entities with a focus on documentary checks aimed at exposing risky businesses; to continue the process of increasing the level of transparency in the activities of tax and customs authorities; pay special attention to simplifying customs procedures; to possibly speed up the introduction of an electronic customs clearance system in order to minimize contacts between customs officials and business entities.

The President also instructed him to provide for timely implementation of the program for modernization and reconstruction of Meghri checkpoint, which will bring to completion the process of modernizing and refurbishing Armenia’s border checkpoints. The SRC was also instructed to continue making targeted efforts toward improving the rating estimates provided by various international organizations regarding the applicable tax and customs procedures.