Poor performance of State Revenue Committee`s e-invoicing system  causes tremendous damage to Armenian economy - businessman 

ArmInfo. Every year, the State Revenue Committee (SRC) of Armenia causes hundreds of millions of drams in damage to the country's economy. This is the assessment made by Vahram Mirakyan, co-founder and president of the Mantashiants Entrepreneurs' Club.

This time, he clarifies, it's not about the SRC's inspection strategy, which has a "terrorist" nature toward businesses, where the damage is often indirect, but rather about direct and concrete damage. This refers to the measurable damage the SRC inflicts on the economy through its "Electronic Payment  Documents" (e- invoicing).

According to Mirakyan, almost every month, primarily between the 17th  and 22nd, e-invoicing begins to malfunction or operate very poorly  and slowly-for hours, sometimes even days. This problem has persisted  for many years, and the State Revenue Committee has been unable to  resolve it.

When e-invoicing isn't working, it means that transactions,  transfers, reporting, etc., carried out through this system  throughout the republic are frozen. Speed is an extremely important  factor for the economy, because it leads, among other things:

Transaction costs. In economics, it's a well-known fact that the  faster a transaction (financial, legal, logistical) is completed, the  lower its . Fewer costs = more transactions.

Loss of money velocity: if money circulates quickly, the same amount  of money creates more GDP. This is a basic macroeconomic formula.  According to the IMF, a 10% increase in money velocity leads to GDP  growth of 2-3% on average. 3. Loss of competitive advantage due to  decreased speed: countries that provide fast transactions and a  predictable system attract more investment, and businesses are more  loyal to the government system and trust it.

If we calculate how many hours per year the State Revenue Committee's  electronic invoicing system is down and then understand how much GDP  is generated in the Republic of Armenia per hour, we can roughly  estimate the damage the State Revenue Committee causes to Armenia's  GDP. It's worth noting that the figure is quite large. "Personally, I  suffer from the State Revenue Committee's inoperative reporting  system from time to time," Mirakyan wrote on social media.

Furthermore, the Union head noted, the State Revenue Committee also  acts as a "unilateral dictator" in this matter, since, for example,  if a taxpayer is late with their taxes, a fine is automatically  assessed every day.  However, no one is held accountable for problems  caused by the State Revenue Committee's inaction.

"When a taxpayer makes a mistake, the State Revenue Committee  immediately and harshly punishes them, but when the State Revenue  Committee's reporting system fails and an employer is forced to pay  its employees overtime for nighttime or weekend work, they suffer  huge losses due to late payments, and the State Revenue Committee  bears no responsibility," he noted.

"Recently, the State Revenue Committee has begun occasionally  apologizing for system failures. I propose that instead of fines,  entrepreneurs also apologize for incorrect tax calculations, late  reporting, or other violations, to ensure an equitable and fair  approach.

Or, after all, is everyone equal before the law, but some are more  equal?" concluded Vahram Mirakyan.

As a reminder, e-invoicing in Armenia is a state-run system for  "Electronic Payment Documents," implemented by the State Revenue  Committee (SRC) on October 1, 2023. It requires organizations and  individual entrepreneurs to issue and submit all payment documents  electronically through a dedicated tax service portal, rather than in  paper form. The system can be accessed through the electronic  reporting system (file-online.taxservice.am).