Friday, November 2 2018 11:07

ArmInfo. The issue of raising the value added tax (VAT) rate is not on the government agenda. This was stated by Atom Janjughazyan, Acting Minister of Finance of  Armenia on November 2 during the discussion of the draft budget for  2019 in the standing commissions of the parliament.

According to Janjughazyan, the annual budget losses due to various  preferential regimes are estimated at 442 billion AMD today. As a  result, the financial authorities thought about revising the  country's tax legislation. One of possible ways is to revise direct  taxes in the form of a reduction in taxation of capital and income  (income tax, income of individuals, in terms of property tax) by  increasing the burden of indirect taxes - consumption tax (VAT,  excise and a number of duties).

However, as the Acting Minister assured, the Armenian government is  not considering the possibility of increasing the VAT rate. The  current tax rate, according to Janjughazyan, is adequate to the  current potential of the Armenian economy, meanwhile, its increase  harbors threats, including in the form of a reduction in consumption.

In the context of budget losses, as the Acting Minister of Finance  noted, the government thought about expanding the list of excisable  goods. The tax field in the field of gambling will also be revised in  order to "establish a fair taxation correlating with the results of  the field". The government will also have to decide on preferential  and alternative types of taxation.

Earlier, answering the question of ArmInfo, head of the RA State  Revenue Committee David Ananyan stated that in the context of  reducing alternative taxation systems, the authorities of the country  will simplify tax administration. Thus, if today there are 5  alternative taxation systems - self-employed, family business  entities, payers of turnover tax and patent tax, as well as those  that are in the general field of taxation, then as a result of the  reforms their number should be no more than 3. At the same time,  according to him, the Cabinet of Ministers of Armenia has high  expectations in the line of tax revenues of the state budget.  "Therefore, we must conduct a very balanced and well-thought-out tax  policy," he said.

To recall, on November 1, discussions on the draft budget for 2019  started in the standing committees of the parliament. As expected,  the document will be discussed by the legislator on November 13. The  project was approved by the Cabinet on September 27 and became the  first major financial and economic document prepared in the form of  program budgeting.

Thus, the nominal GDP of Armenia in 2019, according to the draft  budget for the next year, will grow by about 560 billion - from the  expected by the end of 2018 6.193.0 billion AMD($ 12,752.6 million)  to 6,756.2 billion AMD ($ 13,717.5 million) pledged in the project.  GDP growth, according to the document, will be 4.9%, instead of 4.5%  laid down in the approved state budget for the 2018. The following  year's consolidated budget in terms of revenues is estimated at  1.533.6 billion AMD (without revenues from inter- budget transfers)  instead of 1.333.5 billion AMD in 2018, and in expenses - 1.685.2  billion AMD (without receipts from inter-budget transfers), against  1.500.5 billion AMD this year, the deficit is about 151.6 billion  drams or 2.2% of GDP, against 156.9 billion AMD envisaged in 2018 or  2.7% of GDP, but revised to 103.5 billion AMD (1 7% / GDP). Sources  of financing the budget deficit will be 54.2 billion AMD- domestic  sources, and 97.4 billion AMD- external. Community budgets for 2019  are estimated to be 138.9 billion AMD (including official grants from  the state budget) in the line of income, and 138.9 billion AMD of  expenses. This year, a figure of 130.1 billion AMD was set. 12-month  inflation is expected at 4% with an acceptable limit of fluctuations  of +/- 1.5%. In 2019, capital spending from the current 2.4% of GDP  will grow to 3.2% of GDP. State treasury revenues will make 1,490.6  billion AMD (1.354.8 billion AMD this year) or 22.1% of GDP, of which  tax revenues and state fees will be 1, 399.2 billion AMD or 20.7% of  GDP, instead of 1.255.8 billion AMD or 20.3% of GDP in 2018, expenses  were 1 trillion 642.2 billion AMD against the current 1,458.3 billion  AMD. Current expenditures will amount to 1,422.7 billion AMD (21.1% /  GDP), instead of current 1, 312.3 billion AMD (21.2% / GDP). The  deflator index will be 104%, against 104.4% predicted by the end of  this year. In 2019, official grants amounting to 39 billion drams are  expected from international structures and foreign states, instead of  35.8 billion drams in 2018. Other budget revenues will be 52.4  billion drams next year, instead of 23.9 billion drams for the  current year, official grants - 39 billion. The ratio of investments  to GDP in 2018 is projected at 23.3% instead of 23.6% in 2019,  exports in 2019 are expected to reach 41%, against the projected in  2018.