Wednesday, September 11 2019 16:24

ArmInfo. According to the  authors of the document "Strategies for reforming the public finance  management system for 2019-2023" and the "Program of measures of the  public finance management system for 2019-2023" the main vision is  the fair distribution of public wealth. 

The document, developed by the Ministry of Finance of Armenia  together with experts involved in the framework of technical  assistance of the Asian Development Bank (ADB) and in cooperation  with state bodies, has been presented to the public on a single  portal of legal acts e-draft.am.

As noted in the brief review of the document, the outlined reforms  are mainly aimed at increasing the level of control over the use of  public resources, fiscal discipline and financial compliance. "Within  the terms stipulated by the draft, the efficiency of state  expenditures will increase, the quality of services and procedures  will be ensured, as well as a stable increase in tax fees and a  reduction in tax debt," the draft reads.

According to the authors of the document, an important priority of  the public financial management system (PFMS) is to ensure compliance  with current legislation, as well as economical, useful and efficient  resource management in accordance with the principle of "value in  exchange for money".

Thus, according to the rationale for the document, the envisaged  reforms imply the following main directions for increasing the PFMS:  effective spending of funds received under credit and grant programs,  development and improvement of ways to use borrowed funds; improving  policies aimed at reducing the shadow economy and creating a  competitive environment, modernizing tax administration; targeted,  economical and efficient use of public finances and improvement of  financial discipline; optimization of public administration system;  increase in the share of expenses aimed at the development of human  capital and infrastructures; introduction of a fair and transparent  public procurement system, as well as a unified electronic system for  managing public finances and a system for managing public  investments; the elimination of the causes of corruption in the  management of public finances.

The planned reforms will affect 14 areas: forecasting the main  macroeconomic and budget indicators, accountability of fiscal risks;  government revenue and tax administration policies; budget control  and the treasury system; strategic planning, preparation of the state  budget and medium-term spending programs, budget programming; public  debt; public sector accounting, corporate public accounting and  auditing; external control and audit; management and control of state  non-profit organizations; public procurement system; management of  public assets and investments; local bodies financial management;  government financial management information system.

Despite the wide range of ideas and goals expressed, nevertheless,  the document does not envisage high figures, the so-called targets,  to which society, hand in hand with the government, will strive for.  So, for example, the draft says that the tax policy of the state  should be aimed at reducing the shadow economy and creating a  competitive business environment (according to the Statistical  Committee of the Republic of Armenia, the shadow economy reaches  about 22%).

It is also noted that tax reforms should be based on the priority of  developing the national economy and increasing the investment  attractiveness of areas that are considered priority from the point  of view of developing the same national economy.

The authors of the project also note that numerous tax incentives  have been established by the current tax legislation, which have yet  to be assessed for their effectiveness and targeting, and, if  necessary, abandon the "unnecessary" ones. The goal, as indicated, is  to promote the development of the national economy, to increase its  investment attractiveness and the efficiency of income distribution.  Nevertheless, it does not say how much it is planned to reduce the  "shadow" as a result of the reforms in digital terms, to which  "ceiling" the country is striving to achieve both in the direction of  providing taxes / GDP and investment in GDP.