If You Want to Have a State, You Must Pay Taxes, Because There Are No Taxes – There Is No State: Pashinyan

The tax is for having a state; it has no other meaning. If you want to have a state, you must pay taxes, because where there are no taxes, there is no state. This was stated by Prime Minister Nikol Pashinyan during his visit to the State Revenue Committee on January 19, where he discussed the committee's operational report for 2023.

Head of the State Revenue Committee Rustam Badasyan and his deputies reported on the activities carried out during the reporting period. They presented the goals and expected outcomes of the government's action program for the years 2021-2026 and the strategic program for the development and improvement of the committee’s administration.

The report regarding the committee's activities for 2023 indicated that it secured tax revenues of 2 trillion 221.9 billion drams, exceeding the previous year’s figure by 296 billion drams or 15.4%. It was emphasized that state budget revenues have nearly doubled compared to 2017.

The year 2023 was characterized by effective measures against the shadow economy. The target set by the government program, in which the tax-to-GDP ratio was expected to improve by 0.5 percentage points, has been met to at least that extent according to the current forecasts. An increase in all tax types was recorded, except for the royalty fee for resource usage, mainly due to international metal prices.

It was reported that taxpayers were returned approximately 362.9 billion drams, exceeding the previous year's figure by 100.1 billion drams or about 38.1%. The VAT return amounted to 288.4 billion drams, surpassing the 2022 figure by 75.4 billion drams or 35.4%. Notably, the majority of the returned income tax pertains to mortgage repayment, with 52 billion drams returned to 38,911 beneficiaries through electronic platforms in 2023, exceeding the 2022 figure by 42%, while the number of beneficiaries rose by 33%.

According to data from accounting documents (including cash register receipts), a total of 648.7 million transactions worth 12.2 trillion drams were conducted, surpassing the previous year's figures by 45 million transactions and 2.1 trillion drams. A record increase in job positions and average salaries was reported. The number of income-generating jobs in November reached approximately 738,000, which is 5.2% higher than the previous year's figure, with the average salary at 293,000 drams, reflecting a 10.6% increase.

During the reporting year, the tax authority conducted 1,186 comprehensive tax audits, recovering 38.4 billion drams, and as a result of inspections and studies, an additional obligation of approximately 52.2 billion drams was identified, including thematic studies amounting to 9.4 billion drams. Based on 82,752 analyses, an additional 45.6 billion drams in tax was calculated.

Addressing compliance with tax obligations by businesses, the Prime Minister mentioned that there are various roadside trade locations where cash registers are nonexistent. He instructed that in all cases where the legislation requires a cash register, the individuals should be informed that they must have one. It is crucial that this message should be consistently conveyed without any immediate enforcement actions.

The essence is not merely about collecting the taxes, he emphasized; it's about establishing a tax culture as it is a matter of citizen-state relations where paying taxes helps address diverse needs of the citizens. Reiterating, he stated that even if a citizen pays a nominal 5 drams a day, that person is a taxpayer, a citizen, a subject.

The Prime Minister also inquired about the resolution of disputes with organizations importing vehicles. Rustam Badasyan assured him that they are confident about their actions and justifications regarding the tax policies.

Various initiatives have been implemented to enhance the quality of taxpayer services. With the introduction of an electronic exchange system, approximately 170,000 documents have already been exchanged through personal accounts.

Furthermore, a range of measures was presented regarding improvements in customs procedures for 2023, emphasizing the simplification of customs administration. As a result of easing the transit declaration process, it is now possible to submit a single declaration for the entire shipment instead of individual declarations for each item, leading to a 40% reduction in the time spent drafting transit declarations.

Additionally, various electronic platforms in the tax and customs administrations have been upgraded and enhanced in parallel, including the introduction of automated transfer pricing registration systems and automated refunds for taxpayers.