Interview of the First Deputy Chairman of State Revenue Committee of Armenia Karine Minasyan to Mediamax Agency and Banks.am portal

- You became the First Deputy Chairman of the State Revenue Committee of Armenia recently. Which issues did require your primary attention at the new position?

- The activity of the State Revenue Committee is in the center of the country leadership’s attention, and tax system reforms are considered the basis for progressive economic development.

After combining the tax and customers structures, the State Revenue Committee initiated large-scale reforms. A strategy of tax and customs administration was approved by the decision of the government in August, 2008. Its implementation is a priority for the team of the State Revenue Committee. Within the framework of reforms, all initiatives of the State Revenues Committee undergo all-comprehensive expertise, including ones by international structures and their implementation starts only after they are approved by the supreme council on implementing new culture for state revenues’ administration.

I came to the Committee from CB, where I had been dealing with development projects for many years, and the experience and the knowledge I had gained helped definitely at the given stage of reforms. The primary task for me is implementation of 3 groups of projects, which aim at improving tax administration.

The first group is related to implementation of a tax control system, based on assessment of risks. This, in its turn, implies formation of new control tools, which will allow revealing the riskiest taxpayers in terms of tax evasion and focusing efforts of the State Revenue Committee on those very taxpayers.

The second group of projects aims at improving taxpayers’ service. Our tasks include provision for the highest level of awareness among taxpayers, implementation of service standards and increase of responsibility for their implementation, which will create the necessary conditions for correct self-assessment by the taxpayers, reduction of the number of law violations, secure transparency of the State Revenue Committee’s activity.

The third group of projects is directed at improving the internal management system in the Committee, including ones aiming at improving elaboration of strategies, planning and other internal procedures.

- At which stage is the process of implementing “single window” principle for registration and service of companies now?

- One should differentiate the processes of registration and everyday service of organizations. At this stage, we talk about combining procedures of their registration. As a result of numerous discussions, an agreement was reached, according to which registration of companies and provision of the taxpayer’s registration number will be carried out with the help of the Ministry of Justice. The maintenance of organizations is an individual group of business processes, which is implemented by various state structures and it is yet premature speaking about combining those.

It is yet difficult to imagine combination of services, provided by tax and sanitary-and-epidemiologic structures, but at the level of a single tax body, undoubtedly, the services, rendered to the taxpayer, should be provided from a “single window”.

The State Revenue Committee has already approved the strategy for taxpayers’ service, where this principle is fixed. Moreover, we try to expand the range of service, rendered to taxpayers, as much as possible. In 2010, we plan for opening of service centers in regions with high concentration of taxpayers. By setting up service centers, we plan to expand the range of information service. 

Fast and quality service will be conditioned by availability of highly qualified specialists, use of advanced information technologies and modern standards of the services provided. The educational programs and seminars for taxpayers will be expanded significantly.

The range of virtual services will expand to the maximum; works will be initiated on establishing a “call-center” in 2010. Our task is to provide for the best level of taxpayers’ service, however, at the same time, we also expect better discipline among the latter. The process should be reciprocal.

- How does the process of shifting to electronic provision of tax reporting proceed? How many companies have already used the system and can all legal entities in Armenia use that system?

- There is a service center already set up in the center of Yerevan for servicing taxpayers, who want to present tax reporting in electronic format.

Here the State Revenue Committee has somewhat passed ahead of approval of the corresponding norms, although the parliament has already approved the legislative package on electronic reporting, which will come into effect on January 1, 2010.

The Committee can accept electronic reporting already today. Everyone can visit our center and receive the necessary consultations. Since January 1, 2010, the provision of electronic format reporting will become obligatory for certain groups of taxpayers, such as, for instance, banks, credit organizations, payment-account organizations, participants of the security market, major companies, state management establishments, the turnover of which exceeded 100mln AMD last year, state non-profit organizations. And since July 1, 2010, this will become necessary for all companies, the annual turnover of which made 100mln AMD and more in the previous year.

The center for servicing electronic reporting carries out works on concluding agreements on electronically provision of reporting to the tax body and on provision of electronic passwords.

Unfortunately, not many people yet use this opportunity, but the advantages are obvious for ones, who have chosen this variant.

- Aiming at improving Armenia’s investment attractiveness, the State Revenue Committee planned to spread multi-language tax legislation and administration manuals in foreign countries. Is there progress in that direction? 

- The work on updating and spreading tax information is constantly in process. The State Revenue Committee makes maximum efforts on providing for transparency of its activity and specifying the changes in tax legislation and administration.

Of course, first of all attention is focused on domestic investors, and the materials are mainly published in Armenian. However many materials have already been translated into Russia, and in the nearest future tax and customs guidelines will be published in English as well.

It is not a secret that translations are expensive. However, even in conditions of the crisis, this process will not be interrupted. Moreover, we plan to expand the list of both print and electronic multi-language materials for taxpayers.

- The latest report of “Doing Business” considered the longer period for paying taxes, as compared to developed countries, to be one of the oversights by Armenia. Are there works on optimizing this procedure?

- Of course there are, moreover, significant progress has been marked in the given sphere already in 2009. It was not taken into account in the latest rating, since the assessment is carried out in the first months of the year.

The period for paying taxes has significantly reduced: the necessity to provide certain reports has been lifted, and for certain taxpayers, the monthly order for paying taxes was substituted by the quarterly one. So, according to the package of the corresponding legislative changes, companies, the turnover of which makes up to 58.35mln AMD, estimate the income tax and the profit tax basing on the generally established order and provide a simplified settlement on the mentioned types of taxes once a year; employers, who have up to 5 employees, provide quarterly reports instead of monthly ones; companies, the turnover of which exceeds 100mln AMD, apply a special order for tax accounting instead of the international accounting standards; it is also established that companies, which do not pay value added tax, do not present tax reporting. 

I believe, however, that the opportunity to provide reporting in electronic format will be the most important achievement in the given sphere. It will allow saving human resource, efficiently using time, increasing the quality of work and significantly reducing expenses of taxpayers.