“Prime Minister’s document is nonsensical”
During a meeting with the Union of Manufacturers and Businessmen of Armenia, Prime Minister Tigran Sargsyan announced that the government intends to raise an additional 101 billion drams for taxes than the previous year in 2012.
The Prime Minister is preparing to submit an adequate document to the National Assembly. Economist Vahagn Khachatryan is convinced that the government won't manage and explained why during an interview with "A1+".
"The Prime Minister simply wants to show that he is doing something and that he wants to increase taxes by 101 billion drams, which is 6.8 percent more than the previous year.
In reality, when you try to understand the logic of the budget, you see that it doesn't mean anything. Armenia won't see any changes.
As for the plan to increase taxes in 2012, everyone knows that that is the demand of the World Bank and international organizations that are well aware of Armenia's economic state and are presenting demands based on political considerations. During the government's session in late September, the tax collectors announced that they couldn't ensure a 101 billion dram increase since that had to be at the account of oligarchs, or the account of medium and small businesses.
"A1+": Does this mean that the budget won't increase in 2012 through tax increase?
Vahagn Khachatryan: It is a matter of taking money from the oligarchs. A political decision needs to be made, and that decision has to be made by Serzh Sargsyan. If Serzh Sargsyan issues such a statement, it means that the entire economic system will change in Armenia. There still hasn't been such a statement, meaning that the attack will be against small and medium businesses.
So, collecting amounts is unreal and next year we will hear them tell us why the taxes weren't collected.
"A1+": Who will be held responsible for the tax collection?
V. K.: There has never been a case instigated against the prosecutor general's office, the police, the government or the Central Bank for not fulfilling duties. If there is no objective to collect taxes from oligarchs, they will pressure small and medium businesses.
"A1+": Is there another version?
V. K.: The World Bank proposes to increase the foreign debt. Whereas the foreign debt was 3 billion 805 million dollars in 2011, according to the draft, that number will be 4 billion 100 million. The amounts that will increase from tax collection will be the same amounts taken from the budget.
"A1+": During the meeting with manufacturers, the Prime Minister announced that tax collection will increase pensions and subsidies. Shouldn't we expect increase?
V. K.: There is no sense in what the Prime Minister said. During the meeting, he also mentioned that the country foresees 1.5 billion dollars in investments for the development of experts, but there is no sense in that either. Is it possible to eliminate monopolies in Armenia? Is Armenia ready to eliminate shady economy? I am aware of the interview with President of the Union of Businessmen Arsen Ghazaryan in which he clearly says if the authorities don't lead a struggle against the oligarchs, there will be no development in Armenia.
I don't know if Mr. Ghazaryan raised this issue at the meeting with the Prime Minister. You won't find any other country on this planet where sugar and flour are imported at a lower price than the global price. I am convinced that there is no other country like that, except for Armenia. We know that the importer is an MP by the name of Samvel Alexanyan. In this situation, any document presented by the Prime Minister is not serious.
Interview by Victoria Abrahamyan
