In distinct from business community of Armenia, the World Bank positively evaluates the adoption of Tax Code of Armenia

ArmInfo. The World  Bank  gives a positive evaluation to the Tax Code, recently adopted by  Armenian parliament (TC), Gohar Gyulumyan, the chief economist of  the World Bank  Yerevan office.

According to Gyulumyan, the adoption of tax code of Armenia was the objective necessity. During recent three years specialists  of the bank observed how Armenia increased the volume of external debt  for 7-8% annually. At the same time, starting from 2013, due to global financial crisis, the external borrowing turned very problematic.

The volumes of transfers coming from Russia also decreased due to economic situation in that country.  According to Gulumyan, there is no reason by now to  hope  former capacities will recover, because the factors that lead the Russian economy to the present situation, still do exist.  The investments volume also dropped  down, particularly in respect to private sector. Such a picture could be observed maybe in 90ties. Armenia is a  small country, functioning mainly due toexternal financial flows, and now has no option except increasing own revenues.

According to the representative of World bank, Armenia cannot fund the 4-5%  state budget gap at this stage. In this context, there is a need to thin over the option of securing revenues due to internal  resources,

" It became obvious, that there is no any other option except studying the possibilities and dimensions, where the previous tax code set preferences, and to reduce those preferences where possible, to increase the tax load in respect to rates, to improve the administration and  to bring in the taxation field that part of economy not participating to  tax capsulation processes, Gyulumyan stated.

To recall, Armenian National Assembly passed the second reading of  the draft new Tax Code with 79 votes "for," 24 votes "against," and 1  "abstention" on September 29.  The experts and business community criticized the new Tax Code. One of the reasons of urgent adoption of  the document was IMF's requirement related to providing regular  assistance to the country amounted to $130 mln.  The tax based incomes  estimated in the Draft Budget 2017  at AMD 1 trln 135 bln are  justified with the expected 5 % GDP growth and will not generate any  stricter conditions for business, Vardan Aramyan, the Minister  of  Finance stated answering ArmInfo question.

According to the Minister, about AMD 16 bln  is expected to receive  in respect to import based taxes. This year large volumes of import  has been expected from third countries, but actually the import flow  came from EEU countries, with less tax expectations accordingly. The  factor of  investment projects reated VAT postpones could not be  denied as well, Aramyan mentioned. Particularly, in 2016 the  Government rendered a payment grace for  AMD 3 bln more than  expected.

As Minister ensured, already next year any unjustified intervening   to business activities will be cancelled, as well as unjustified  taxation. And the tax load should be increased for those who wok "in  the shadow" and do not observe the law. In this context  the  expectations in respect to Draft Budget, which   are higher than  those for this year will not affect business conditions.

To remind, the tax based  budget revenues for 2017 are estimated at  AMD 1 trln. 135 bln, or  21% GDP, which is  0,3%  higher than the  same indicator for 2016 ( AMD 1 trln 129 bln  in  2016- and  AMD 1  trln 065 bln  in 2015 ). Armenia's budget revenues in 2017  will form  AMD  1 trlan  210 bln (about  $2,55 bln.).  Tax based revenues will  form  93,8% of all the budget incomes: benefit based revenues are estimated at AMD 347,2 bln, profit based taxes - at AMD 134,2 bln,  custom fees - AMD 53,6 bln, environment fees -at AMD 32,7 bln,  license fees and turnover tax - AMD 24,3 bln,. In spect to direct social security fees AMD 14,3 bln  income is expected.