World Bank Highlights Armenia's Shadow Economy
Aristomene Varoudakis, head of the World Bank’s Yerevan office, told a recent press conference that the 'shadow economy' and inadequate tax collection was impeding Armenia’s economic development.
Varoudakis suggested that the shadow economy in Armenia is equal to 35-40% of gross domestic product (GDP), and he stressed the importance of regularizing this informal economy in order to increase tax revenues and finance much needed social services. Greater transparency would also benefit the companies and employees involved, he added.
Varoudakis said government action was especially urgent in Armenia’s export-oriented mining industry. “The mining sector is somewhat undertaxed in Armenia,” he said. “The tax regime in the mining sector falls far short of international best practice.”
The World Bank has agreed a USD25m budgetary loan to finance the reform of public finances and, in particular, measures related to new tax legislation, tax compliance and regulation of mining companies.
The World Bank and the International Monetary Fund have signaled the problem of tax collection for a long time. Although revenues have grown significantly since the late 1990s, the total still only represented about 16.5% of GDP last year.
Varoudakis said there had been a 13% production rise in Armenia’s mining industry from January to April this year. Armenia’s full-year GDP growth may amount to 4-5% for the year as a whole after 7.2% growth in the first four months, thanks to the government's anti-crisis fiscal stimulation, which generated 8.8% growth in the construction sector.
Mostrando entradas con la etiqueta Armenia. Mostrar todas las entradas
Mostrando entradas con la etiqueta Armenia. Mostrar todas las entradas
jueves, 1 de julio de 2010
miércoles, 23 de junio de 2010
Shadow economy 35-40 per cent of Armenia’s GDP, WB rep says | News from Armenia - NEWS.am
Shadow economy 35-40 per cent of Armenia’s GDP, WB rep says | News from Armenia - NEWS.am
Referring to economic analysts, Head of the WB office in Yerevan Aristomene Varoudakis said that the share of shadow economy constitutes 35-40 per cent of Armenia’s GDP.
He urged the Government to make shadow economy taxable, thereby increasing tax revenues and social payments.
Varoudakis pointed out that the mining industry constitutes the lion’s share of shadow economy. He pointed out that U.S. $25m of the WB loan will be directed to legislative and structural reforms in the mining industry.
A 13% increase in Armenia’s mining industry was registered this January-April.
Referring to economic analysts, Head of the WB office in Yerevan Aristomene Varoudakis said that the share of shadow economy constitutes 35-40 per cent of Armenia’s GDP.
He urged the Government to make shadow economy taxable, thereby increasing tax revenues and social payments.
Varoudakis pointed out that the mining industry constitutes the lion’s share of shadow economy. He pointed out that U.S. $25m of the WB loan will be directed to legislative and structural reforms in the mining industry.
A 13% increase in Armenia’s mining industry was registered this January-April.
domingo, 20 de junio de 2010
World Bank Urges Action Against Armenian 'Shadow Economy' - Radio Free Europe / Radio Liberty © 2010
World Bank Urges Action Against Armenian 'Shadow Economy' - Radio Free Europe / Radio Liberty © 2010
YEREVAN -- The head of the World Bank in Armenia urged the government on June 18 to clamp down on a huge informal sector of the country's economy, RFE/RL's Armenian Service reports.
Aristomene Varoudakis said the shadow economy and the resulting tax evasion is one of the most serious problems hampering Armenia's economic development.
"I have no number to give you, but what I am hearing from different analysts is that the shadow economy in Armenia could be equivalent to as much as 35 or 40 percent of GDP," Varoudakis said. "And of course, it is a very important challenge to formalize this informal economy so as to increase tax revenues and be able to pay for much needed social services."
Varoudakis said companies involved in the shadow sector would also benefit from the legalization and transparency of their operations. "And people working for those businesses will be better protected," he argued.
Both the World Bank and the International Monetary Fund have long been pressing Armenian authorities to improve tax collection. The government and Prime Minister Tigran Sarkisian, in particular, have repeatedly declared improved tax administration a top priority.
Varoudakis said government action is especially needed in Armenia's export-oriented mining industry. "Now the mining sector is rather undertaxed in Armenia," he said.
The World Bank official said the government has pledged to remedy the situation with major changes to Armenia's tax legislation regulating the work of mining companies. The planned reform will be financed from a $25 million budgetary loan, which he said the bank plans to allocate to the government this year.
YEREVAN -- The head of the World Bank in Armenia urged the government on June 18 to clamp down on a huge informal sector of the country's economy, RFE/RL's Armenian Service reports.
Aristomene Varoudakis said the shadow economy and the resulting tax evasion is one of the most serious problems hampering Armenia's economic development.
"I have no number to give you, but what I am hearing from different analysts is that the shadow economy in Armenia could be equivalent to as much as 35 or 40 percent of GDP," Varoudakis said. "And of course, it is a very important challenge to formalize this informal economy so as to increase tax revenues and be able to pay for much needed social services."
Varoudakis said companies involved in the shadow sector would also benefit from the legalization and transparency of their operations. "And people working for those businesses will be better protected," he argued.
Both the World Bank and the International Monetary Fund have long been pressing Armenian authorities to improve tax collection. The government and Prime Minister Tigran Sarkisian, in particular, have repeatedly declared improved tax administration a top priority.
Varoudakis said government action is especially needed in Armenia's export-oriented mining industry. "Now the mining sector is rather undertaxed in Armenia," he said.
The World Bank official said the government has pledged to remedy the situation with major changes to Armenia's tax legislation regulating the work of mining companies. The planned reform will be financed from a $25 million budgetary loan, which he said the bank plans to allocate to the government this year.
lunes, 14 de diciembre de 2009
41% of Armenia's economy in shadow: Artsvik Minasyan | News from Armenia - NEWS.am
41% of Armenia's economy in shadow: Artsvik Minasyan | News from Armenia - NEWS.am
https://mail.google.com/mail/?ui=2&view=bsp&ver=1qygpcgurkovy
No proposal of ARF Dashnaktsutyun was accepted by RA Government since it joined the opposition, even the ones presented when ARFD was in ruling coalition and were underway, are currently turned down. This proves the fact that RA authorities are guided not by political or economic expediency, but political conjecture, ARFD member Artsvik Minasyan informed NEWS.am.
He expressed bewilderment with the fact that RA Government even rejected the proposal by ARFD to increase budgetary allocations to NKR security zone settlement. Minasyan also criticized severely the authorities’ economic policy stating that Armenia’s economy will hereafter depend on international market due to their illiterate actions. As for the pre-crisis achievements of Armenian economy and GDP two-digit growth, it is nothing else but a bubble, if it does not impact the social level of the population, Minasyan underlined. “Such a growth is worthless if people keep on living in bad conditions,” he outlined. According to him, Armenia’s banking sector is in deplorable state too.
Referring to the RA authorities’ intention to abolish oligopoly, Minasyan noted all the steps in this direction taken by Government can expose over 4% of the economy, whereas according to ARFD calculations (that matches with the official data) the level of shadow economy is up to 41% in Armenia or even 60% under certain estimates. “41% of hidden economy totals AMD 243bn, of which 4% is a scanty part and will not affect the economy dramatically,” Minasyan concluded.
L.A.
https://mail.google.com/mail/?ui=2&view=bsp&ver=1qygpcgurkovy
No proposal of ARF Dashnaktsutyun was accepted by RA Government since it joined the opposition, even the ones presented when ARFD was in ruling coalition and were underway, are currently turned down. This proves the fact that RA authorities are guided not by political or economic expediency, but political conjecture, ARFD member Artsvik Minasyan informed NEWS.am.
He expressed bewilderment with the fact that RA Government even rejected the proposal by ARFD to increase budgetary allocations to NKR security zone settlement. Minasyan also criticized severely the authorities’ economic policy stating that Armenia’s economy will hereafter depend on international market due to their illiterate actions. As for the pre-crisis achievements of Armenian economy and GDP two-digit growth, it is nothing else but a bubble, if it does not impact the social level of the population, Minasyan underlined. “Such a growth is worthless if people keep on living in bad conditions,” he outlined. According to him, Armenia’s banking sector is in deplorable state too.
Referring to the RA authorities’ intention to abolish oligopoly, Minasyan noted all the steps in this direction taken by Government can expose over 4% of the economy, whereas according to ARFD calculations (that matches with the official data) the level of shadow economy is up to 41% in Armenia or even 60% under certain estimates. “41% of hidden economy totals AMD 243bn, of which 4% is a scanty part and will not affect the economy dramatically,” Minasyan concluded.
L.A.
miércoles, 8 de julio de 2009
In Armenia, more than 60% of the shadow economy.
By the end of 2009, Armenia's external debt at the expense of new loans close to $ 3 billion, which at the expected ratio of more than 40% of the country's GDP can lead to severe economic consequences.
This was stated in Yerevan today, the Chairman of the Union of manufacturers of domestic products (UMDP) Vazgen Safaryan.
According to him, UMDP submitted to the Government a number of proposals that can positively affect the economic situation in the background of the global financial crisis. In particular, Safaryan called for the restoration of the Ministry of Industry and Foreign Trade. «This step can be a powerful stimulus for economic development and our proposal was understood the prime minister», he said.
UMDP President expressed confidence that Armenia promising areas of industry may be engineering, processing of agricultural products, electrical and chemical production. «In the near future we intend to submit to the government program to develop the country's small aircraft, both production and operation and implementation of light aircraft», said Safarian. According to preliminary estimates, the program requires an investment of $ 500 thousand.
Vazgen Safaryan advocated the provision of cheap credit to small and medium-sized businesses, interest rates are adjusted for inflation should not exceed 8% per annum. According to him, small and medium enterprises in the current circumstances are in need of tax holiday for a period of not more than 5 months.
Head UMDP noticed that if there are more than 60% of the shadow economy is necessary to undertake effective steps in the tax area. According to him, the increase in the fiscal press can lead to a reduction in the tax field. «Entrepreneurs must understand that paying taxes, they can not just sleep peacefully, but also significantly improve the economy of the country», said Vazgen Safaryan.
This was stated in Yerevan today, the Chairman of the Union of manufacturers of domestic products (UMDP) Vazgen Safaryan.
According to him, UMDP submitted to the Government a number of proposals that can positively affect the economic situation in the background of the global financial crisis. In particular, Safaryan called for the restoration of the Ministry of Industry and Foreign Trade. «This step can be a powerful stimulus for economic development and our proposal was understood the prime minister», he said.
UMDP President expressed confidence that Armenia promising areas of industry may be engineering, processing of agricultural products, electrical and chemical production. «In the near future we intend to submit to the government program to develop the country's small aircraft, both production and operation and implementation of light aircraft», said Safarian. According to preliminary estimates, the program requires an investment of $ 500 thousand.
Vazgen Safaryan advocated the provision of cheap credit to small and medium-sized businesses, interest rates are adjusted for inflation should not exceed 8% per annum. According to him, small and medium enterprises in the current circumstances are in need of tax holiday for a period of not more than 5 months.
Head UMDP noticed that if there are more than 60% of the shadow economy is necessary to undertake effective steps in the tax area. According to him, the increase in the fiscal press can lead to a reduction in the tax field. «Entrepreneurs must understand that paying taxes, they can not just sleep peacefully, but also significantly improve the economy of the country», said Vazgen Safaryan.
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