Shadow economy share down in Armenia in last three years 

ArmInfo.The expenses of the State Revenue Committee of Armenia in 2023 were 35% higher than the actual  expenses of the department for 2022 in the amount of 28.3 billion drams. This was stated by the head of the Ministry of Finance Vahe Hovhannisyan on May 31 in parliament at the preliminary hearing of the annual report "On the execution of the State Budget of the Republic of Armenia for 2023". The head of the State Revenue  Committee, Rustam Badasyan, in turn, noted that the department he heads has exceeded the targets planned for 2023.

Hovhannisyan stated that in 2023, for the implementation of 1 program  with 14 activities, the actual expenses of the State Revenue  Committee amounted to 38.2 billion drams (instead of the planned 40.2  billion drams) or 95% of the adjusted annual plan, against 28.3  billion drams in 2022.

As Rustam Badasyan pointed out, the law "On the State Budget of the  Republic of Armenia for 2023" provided 2 trillion 204 billion drams  for tax revenues and state duties, but in fact the State Revenue  Committee contributed about 2 trillion 222 billion drams to the state  treasury. The overfulfillment amounted to about 18 billion drams. The  figure exceeds the 2022 figure by almost 296 billion drams or 15.4%.

At the same time, an increase was recorded for all types of taxes,  with the exception of state duties (a decline of 39.4 billion drams)  and royalties (40 billion drams). The decline in royalties (rent  payments for the right to develop natural resources) is mainly due to  a decrease in international prices for metals. The recourse to the  state duty is associated with the abandonment of the export duty on  copper and molybdenum concentrates.

Thus, in the VAT line the increase was 12.9% or by 87.6 billion  drams, in the income tax line - 44% or by 98.7 billion drams, in the  turnover tax the increase was 8.1%, and in the income tax - 16.8%.

About 362.9 billion drams were returned to taxpayers and individuals,  which exceeds the previous year by 100.1 billion drams or about  38.1%. The VAT refund amounted to 288.4 billion drams, exceeding the  2022 figure by 75.4 billion drams or 35.4%. In 2023, the state  returned income taxes in the amount of 52 billion drams to "mortgage  holders"; in 2017, the figure was only about 4 billion drams.

According to settlement documents (including cash receipts), 648.7  million transactions worth 12.2 trillion drams were carried out in  2023, exceeding the previous year by 45 million transactions and 2.1  trillion drams.

Receipts from the common pot of the EAEU, compared to 2022, in 2023  increased by 32%. At the same time, Armenia allocated about 187.5  billion drams to the general budget of the Community, and received 73  billion drams.

The chief tax officer also shared data on the reduction of "shadow"  in the economy. "According to our observations, over the past three  years the shadow has decreased," he said.

In 2023, the volumes of value added tax, profit tax and income tax  for 2022 were assessed. The State Revenue Committee found that the  tax gap (or gap) is 3.06% of GDP. The indicator, compared to the  previous year, improved by 0.5 percentage points, Badasyan noted.

Note that according to the Ministry of Finance, in 2023, tax revenues  (tax revenues and state duties) of the state treasury grew at a  faster pace - by 0.7 percentage points. - up to 23.4% of GDP (the  program of activities of the Cabinet of Ministers until 2026 plans to  increase the figure to 25%). The upward trend in capital expenditures  continued into 2023. The indicator from 4.6% in relation to GDP  reached 5.2%, which made it possible to properly finance  infrastructure programs in the field of security and social nature.  The growth of tax revenues and, accordingly, the level of GDP  recorded above the planned level, as well as the efforts of fiscal  policy, made it possible to reduce the level of the deficit to 2% of  GDP (0.1 percentage points below the 2022 figure) or by 1.1  percentage points. below the planned level. In absolute figures, the  figure was about 189 billion drams. The level of government debt to  GDP was 48.1%, or 1.4 percentage points more than in 2022. At the  same time, the figure turned out to be lower than planned by 1.7  percentage points.