Tuesday, 5 August 2008
RA Prime Minister Tigran Sargsyan called a consultative meeting to discuss tax administration improvement-related issues. The meeting was attended by members of the Supreme Council on Introduction of New Revenue Management Practices (SCRM), as well as major market owners and administrators. Tigran Sargsyan described those SCRM-endorsed approaches and actions aimed at bettering revenue collection in centralized marketplaces (fairs). The Prime Minister stated in part:
"I wish to advise you that this issue has already been examined at a consultative meeting held with the RA President, as well as in the National Assembly during a discussion organized by the Republican Party. 80% of the overall home trade takes place at the fairs and bazaars just because they provide refuge from taxes. Even the stores with sufficiently high reputation get their supplies in such centralized marketplaces lest they should lose a competitive edge while their counterparts manage to realize huge volumes of goods without having to state them in tax returns. Failure in making a widespread use of cash registers accounts for this state of affaires. We would like you to be our partners in introducing this new concept in the Republic of Armenia." Presenting the steps to this end, Tigran Sargsyan has noted:
"Firstly, we deem that running fairs is an activity subject to licensing in the Republic of Armenia and, therefore, fair administrators will face specific liabilities in this respect. Market and fair managers are supposed to be our partners and fiscal agents. Market chiefs shall be responsible for ensuring the mandatory use of cash registers, and as fiscal agents they will have to enforce this rule on the territories under their control. Market administrators will be the ones to be sanctioned if cash registers are short or fail to be used. Moreover, administrators shall ensure that the whole body of cash registers is organized into a network so as to provide daily statements to corresponding tax authorities: VAT will have to be paid on a daily basis. Sanctions for failure to comply with these rules will be substantially toughened. We will have market owners and managers to sign such arrangements with individual traders as are due to be approved by the government. They are meant to provide for transparency, equal conditions and conflict of interest for the sides involved. You are expected to assist the government in combating black economy in the Republic of Armenia. We cannot have serious achievements in this field without your support. This process is a painful one as it affects several thousands of individuals and entities. We will go through it together and you are seen as our partners in this matter.
I would like you to realize the responsibility placed upon you. I am now asking you to inform your friends and associates of this decision as all the necessary surveys have been carried out, and we are well aware of all the entities engaged in this business. They are numerous and the President's attitude is quite clear-cut and positive: no one is entitled to tax evasion. These rules have to be introduced in any fair or marketplace. We will be addressing the largest facilities in the first place. There is a time-table established for the projected actions. You are kindly requested to abide by this schedule. I am hopeful that you will back our efforts as the problem under review is the most important challenge facing the country, and we do need your support on the way to bettering Armenia's business environment."
No questions having arisen with those present concerning the above-said approaches and requirements, the Prime Minister advised that they may turn to the RA Tax Service by the Government for any clarification regarding these issues.
In conclusion, once again the Prime Minister underscored the need for working promptly and jointly towards improving the situation with tax collection in domestic marketplaces.
