Vartan Oskanyan: Two pieces of bad news
Vartan Oskanyan wrote on Facebook:
"The end of the summer holidays was marked by two pieces of bad news in our economy: a rise in taxes and increased state debt.
Under the Law on Income Tax to take effect on January 2013, taxes will rise. For example, the tax to be paid by the employer will increase by 775 drams in case of a salary of 100,000 drams. This seems to be a trifle, but given the fact that some employers have 50, 100 and more employees, it will total to a considerable amount a year.
But this is not the main problem. The problem is the government's mentality. The government members explain this increase in the tax by a deficit caused by rounding some averaged figures in case of paying the income tax and social payments together. I have a question to the government: Is it possible for this rounding to benefit businesses, at least once, which may become a psychological incentive, especially in the days when the economy is a bad state and businesses need faith and trust in the government. The government can (could) meet this small deficit from the shadow economy.
The second bad news: in the first eight months of this year state foreign debt has grown by 5%, even though no serious debts were incurred. The most alarming circumstance is that in their interviews and statements, government members are preparing society for contracting new debts. Negotiations are being conducted with Russia and the USA for incurring new debts, for attracting $0.8-1 billion and up to $200 million respectively.
There has also been a talk about refinancing the current debt, which implies an increase in the debt burden. We should not forget either that the long-awaited construction of North-South motorway will also be carried with credit resources - $500 million from the Asian Development Bank.
At such a rate, Armenia's state debt may soon reach the 50% threshold of GDP. Despite considerable revenues in the form of debt, no essential progress has been made in the economy since 2009: quite the opposite, there has been a decline in the living standards of people and poverty has grown. This is the only sign of the government's incorrect policy, but the government continues pretending not to notice that. As long as the government does not change their idea of the country's development, the outlook for Armenia's sustainable development will be vague.
