Armenia`s State Revenue Committee  sees great tax potential in  construction sector in 2025

ArmInfo. The State Revenue Committee (SRC) of Armenia plans to collect more taxes from the construction sector in 2025, as stated by the head of the department,  Eduard Hakobyan, on March 24 at a meeting of the NA Standing  Committee on financial-credit and budgetary affairs.  In 2024, tax  revenues (tax income and state duty) to the consolidated budget of  the Republic of Armenia totaled 2 trillion 390.9 billion drams,  showing a  5.1% increase of 117 billion drams compared to 2023. The  tax to GDP ratio in 2024 decreased to 23.6% from 24.1% in 2023.  Hakobyan attributed the decrease in the indicator last year to  economic factors rather than tax collection. When analyzing tax  collections from the domestic economy and imports separately, it is  evident that there was  a 14% increase in the former and a decline in  the latter.

The latter is mainly due to a decrease in car imports, which is an  objective phenomenon. Armenia saw significant re-export volumes in  2022 that sharply decreased in 2024, leading to the reduction in tax  collections from imports. Another negative factor is the decrease in  cigarette imports following  new sector requirements.

As for expectations for the current year, the head of the State  Revenue Committee noted that they are positive. Specifically, in  2025, it is planned to complete the construction of many apartment  buildings, mainly in Yerevan, which has significant tax potential (in  terms of VAT). Another major positive factor driving tax growth is  anticipated income from the banking sector in the form of profit tax.  The latter recorded in 2024 (the profit of Armenian  banks in 2024 amounted to 363 billion drams, slightly more than $910  million, and increased by 1.6 times compared to 2023 - ed.), Hakobyan  added that since the re-export cycle is almost complete, meaning  after reaching its peak, it sharply declined in 2024, and Therefore, collections by customs authorities will  improve.