Friday, October 12 2018 14:09

ArmInfo. "Armenia needs fundamental changes in tax policy. But each thesis should be  discussed with economic entities in order that, regardless of whether  this approach is to his liking or not, business knows what to expect  in the context of 3-5 years" , said the former Minister of Finance of  Armenia Vardan Aramyan during the discussion on the topic "Business  Environment and Economic Policy in New Armenia", organized by the  Public Association for Assistance to Reforms.

According to Aramyan, today Armenia is at the stage of  transformations. In this context, according to the former head of the  Armenian Ministry of Finance, it is important to note that business  likes clear rules of the game, and it's very problematic for them if  they change often. "Changes that should have a result after time must  be predictable in terms of the country's objectives, which it seeks  to achieve in a certain period of time," he said.

In addition, according to Aramyan, before giving a start to reforms  in the sphere of income tax, the Cabinet must "talk" about the  principles of the proposed changes. "Tax policy affects the general  economic policy both in the long and short term, ensuring supply and  demand, and redistributing consumption. It generates expectations and  you need to have a clear vision of prospects," the expert said. In  this context, Aramyan considers it necessary to establish a dialogue  between economic entities and consumers who carry out their  activities on the basis of "messages" - signals from economic  authorities. "If we have inconsistencies here, and consumers and  economic entities will take a conservative approach, and in terms of  investment, they will wait until the situation is settled," he said.

Today, as the economist pointed out, the burden of income tax is on  the employer, which, in his opinion, is wrong. In the meantime, in  world practice, the obligation to declare one's income is borne by an  individual.  At the same time, it must be admitted that the increase  in the tax rate is not welcomed by anyone, as well as paying taxes  from one's own pocket, he noted. "Deeply respecting our singers and  singers, I nevertheless want to ask why they still do not declare  their income?", Aramyan wondered. The reason, according to the  economist, is that the system is incorrectly built, and only with the  introduction of an integrated system of tax administration can the  issue be resolved.

In addition, at present the cornerstone in the matter of income tax  is not so much the question of determining the side of the taxpayer,  but who is responsible for the tax declaration. "No one will pay  taxes voluntarily if he knows that the responsibility for this action  lies with the other. The system must be radically changed and for its  proper operation it is necessary to make sure that the person  receiving the income is his own declarant," he explained. .

Vardan Aramyan admits that it will be impossible to implement the  system immediately and in full, but only in stages. But in order to  record good results at least 10 years later, the work must begin  today. As he recalled, discussions around the introduction of the new  system have been going on since 2008, but then it was decided to stop  this work.  At the same time, according to Aramyan, it is good that  the recent revolutionary events in Armenia did not lead to financial  upheavals. "This is a real achievement," said Aramyan. Back in  December 2017, the principle was adopted, thanks to which political  changes should not in any way affect the financial management of the  country. "At a time when people took to the streets (in the days of  the April velvet revolution, - Ed.), The financial authorities of the  country worked with investors, assuring them that everything would be  alright in Armenia, because the investor is very sensitive to  internal political upheavals. Investor should be confident that the  situation is predictable and controlled, "he said. In 2020, as he  recalled, a new tranche of Armenian Eurobonds is planned to be  placed, and if in Armenia they go for adventurism, the country will  face difficulties. "An investor who will buy Armenian state bonds is  already following developments in Armenia today," he said. Therefore,  according to the expert, the risk factor for the investor must be  reduced. The quality of work of customs also affects the business,  said the ex-minister.  A salary increase for customs officials to  reduce corruption risks, which is being actively discussed today,  will not lead to the desired result, Aramyan noted. "No matter how  much a person's salary is raised, a person who can illegally earn 5  million AMD a month will not be enough for him," he explained.   According to him, in the world this issue is solved in two ways:  first, the entire composition of customs officers is changed, and new  people who are not "adapted for corruption" are recruited, and the  second is evolutionary, when problems are solved gradually. Perov's  decision in the case of Armenia, according to Aramyan, will be in the  spirit of adventurism, since the country does not have sufficient  personnel reserve.  Vardan Aramyan as a solution to the problem  offers a fragmented approach, when changes are made in small areas,  that is, it is necessary to carry out reforms in one inspection body,  and on the basis of its results, draw conclusions on further  measures.