Tuesday, November 3 2020 12:07

ArmInfo.In the face of uncertainty caused by the COVID-19 pandemic and ongoing military action, it is necessary to ensure a smooth consolidation of fiscal  funds in order to ensure budgetary performance and public debt  indicators. The Minister of Finance of the Republic of Armenia Atom  Janjughazyan stated on November 3 at a joint meeting of parliamentary  committees on Economic Affairs and Finance, credit and budgetary  issues, presenting the draft state budget of the country for 2021.

According to the minister, the main goal of the government next year  will be to assist in economic recovery, while not lowering the  targets set for 2020. It is envisaged, in particular, a slight  increase in state budget expenditures. This means maintaining capital  expenditures at the same level, which should lead to an increase in  the growth potential of the economy. They also took into account the  capabilities of the state, especially taking into account the ratio  of capital expenditures to the country's GDP, which should exceed the  average volume of capital expenditures in previous years. At the same  time, when programming capital expenditures the capabilities of both  the customer and contractors and service providers were taken into  account. There is confidence, as the minister noted, that joint  efforts will increase these opportunities.  As for income, as  Janjughazyan noted, it is planned to receive 1.569 trillion drams for  2021, 96% or of which 1,500.9 trillion drams should be tax  deductions. At the same time, the ratio of taxes to GDP will be 23.3%  versus 21.2%. At the same time, grants will have a relatively small  weight in the state budget.  For the current year they will amount to  23.2 billion drams, of which 7 billion drams - to support the state  treasury, the rest - to implement the target programs. The Minister  also considers it necessary to revise the provision concerning the  turnover tax, which should be considered as an alternative type of  tax, and not as a benefit. This type of tax, according to the  minister, was used taking into account the experience of other  states, but not its best option. He added that work is underway to  provide documentation of agricultural products.

Janjughazyan continued that the introduction of the institution of  universal declaration of income of individuals will also be of great  importance, which is very important both from the point of view of  unlocking the potential of individuals who are not considered  employees, and disclosure of information that can be used to develop  policies in other areas such as social assistance, health care, etc.   The minister recalled that this year the state budget of Armenia was  twice amended, due to the overcoming of the negative consequences of  the coronavirus epidemic and military actions, which could not but  have an impact on the economy, and, as a result, on the revenue side  of the state treasury.  Unfortunately, he continued, both factors  continue to exist today, with the result that the level of  uncertainty remains high enough. The Minister informed that the  program of medium-term expenditures was approved, which established  the criteria for 2021, both in terms of macroeconomic stability and  budget parameters, defining the framework for the same indicators for  2022.  It should be noted that despite the difficulties in the  Armenian economy, the state budget for 2021 assumes an increase in  capital expenditures by 215 billion drams. In relation to GDP,  capital expenditures will amount to 3.2% - one of the highest in all  years. The government does not intend to cut current expenditures, in  particular, on health care, education, social support. They will grow  in comparison with 2020, and even with the pre-crisis 2019. In  particular, compared to 2019, spending on health care will grow by  2.1%, on education and culture - by 1.2%. Social security spending  will increase by 2.2% compared to 2020. The expenses will be saved  thanks to loans to replenish the budget, which the republic receives  from the IMF (up to 420 million dollars).