Friday, 1 October 2010
Tigran Sargsyan – The first stage of the seed-breeding program is being kicked off. We have imported high-quality seeds from the Russian Federation. A large amount of preparative work has been carried out under which eligible plots of land were assigned for cultivation purposes. Exacting demands have been imposed on those farmers with whom contracts are being signed at this point of time. They undertake to generate and return first-cycle seeds for reproduction to be used for productivity purposes.
If successful, this five-year program will help enhance efficiency and productivity in the agriculture sector.
Question – The FY2011 budget bill anticipates a 2.7% growth while the IMF had predicted a 4% rise in economy. Why are we that pessimistic? The IMF had similarly criticized the problem of refunds. Though you assured that the sums overdue were subject to immediate refund, no progress has been recorded in this field as of yet. Will the problem be resolved anyhow and which way?
Tigran Sargsyan – Economic forecasts have so far been subject to quarterly changes for individual zones – European Union, United States, Japan – because anomalies are inherent in any crisis, and forecasts may need correcting every quarter.
Armenia’s macroeconomic performance is affected by developments in the global economy in terms of shrinking direct investments, reduced remittances and global market price fluctuations. This causes macroeconomic indicators to be reassessed on a quarterly basis. The point is that they should be balanced in Armenia if we are to build up adequate reserves of stability. This is just what we are doing in cooperation with the IMF.
We have been praised in this respect since all the benchmarks were met in our program. The rate of growth might have been higher than the one specified in National Assembly-approved budget law if we had been spared by this year’s unprecedented fall in agriculture. Nevertheless, we are in advance of the key target of fiscal revenue which adds to our State’s financial stability and immunity. as a whole. This is an important factor. As far as refunds are concerned, having stood out over the past 15 years, the problem will be handled through better tax administration which cannot be improved within a couple of days. Notwithstanding, looking at the upward dynamics of refunds we can see that significant progress has been made in this area. What matters most is that we no longer have any arrears in VAT refunds. Note that for the first time in Armenia exporters have been getting back the overpayments by the end of fiscal year.
Moreover, we undertake that the State will pay interest on the sums left overdue in 2011. In this way we will get rid of our running arrears, but the problem of long-standing refunds will take some time to address. I feel the issue needs to be studied more thoroughly with criminal proceedings to be instituted in such cases as the stated amounts will seem to be inflated overmuch. You may agree with me that it would be unwise to refund several million drams in overpayments to unscrupulous entities.
In view of the above, the problem is not as easy to address as may seem at first sight. But one thing is sure that I would like you to communicate to our entrepreneurs: we rule out the built-up of running VAT overpayment arrears.
This is fairly impossible, because the State itself will be held answerable for misconduct and will have to pay fines and penalties to the private sector for delayed VAT refunds. Therefore, we are in for radical changes in this field.
