Payments from 1000 Large Taxpayers Reach 1 Trillion 61 Billion Drams, Prime Minister

Armenian Prime Minister Nikol Pashinyan stated on his Facebook page that the total amount of taxes paid by the top 1000 large taxpayers in 2019 reached 1 trillion 61 billion drams. This reflects an increase of 122 billion drams (13%) compared to 2018, and an increase of approximately 254 billion drams, or 31%, compared to 2017.

Before formulating the next fact, I would like to mention that direct taxes (income tax, profit tax) are more prone to being shadowed than indirect taxes. This is particularly true for large taxpayers, who are more willing to pay excise taxes and VAT, as these taxes are recovered from consumers because they are included in the sale price. Therefore, the registration of direct taxes from the perspective of tax administration requires more efforts than for indirect taxes.

Let us consider this and examine how the share of direct taxes in the taxes paid by the 1000 large taxpayers has changed in recent years. Accordingly, in 2019, the amount of direct taxes paid increased by more than 4.4 percentage points compared to 2017. Specifically, if in 2017, the direct taxes accounted for only 252 billion drams (around 31.2%) of the taxes paid (807 billion), both in 2018 and 2019, the share of direct taxes stood at 35.6% (335 billion in 2018, 378 billion in 2019). This indicates qualitative changes in the structure of taxes.

The fact that 81,534 jobs have been created or removed from the shadow economy is also observed among large taxpayers. In particular, if during 2018, large taxpayers contributed 173 billion drams in income tax (which is subdivided from paid salaries), in 2019, there was a significant increase with 208 billion drams (20% growth).

During the period from January to December 2019, the top 10 largest taxpayers paid about 257 billion drams in taxes to the state budget, which is an increase of about 23 billion drams or around 10% compared to the previous year.

Throughout 2019, 191 companies in Armenia paid taxes exceeding 1 billion drams. In 2018, this number was 166, and in 2017, it was 141. Similarly, during 2019, 361 companies paid taxes greater than 500 million drams, compared to 320 such companies in the same period the previous year, and only 285 in 2017. During 2019, 555 companies paid direct taxes exceeding 100 million drams, with 497 companies in 2018 and 425 in 2017.