Yerevan/Mediamax/. The heaviest tax compliance burden falls on small and medium enterprises and private entrepreneurs in Armenia.

The results of International Finance Corporation’s (IFC, member of the World Bank) Survey of Armenia’s Tax Code, read this.

Mediamax was informed in the press service of IFC that the survey identified the most costly and complicated tax procedures for Armenian organizations and private companies and recommends reforms to simplify taxation and improve the overall business environment in Armenia.

For example, the survey showed that companies with turnover of up to 5mln drams (around $14,000) spent some 17.5 percent of that complying with tax regulations, whereas larger companies with turnover of over 58.35 mln drams (around $160,000) spent only 0.4 percent. The survey shows that trade-oriented businesses have to undergo the most time-intensive procedures.

According to Thomas Lubeck, IFC Regional Head for the Caucasus, the IFC survey will help Armenia's government pinpoint areas for improvement. “IFC experts are now working on recommendations to help the government improve the business environment, especially for small enterprises with the heaviest tax compliance burden,” he stated.

IFC surveyed 1,000 companies and sole proprietors throughout Armenia on questions related to fiscal year 2009. Tax compliance cost does not refer to the tax actually paid, but rather the administrative costs of paying taxes, such as the time that accountants spend on calculating taxes, producing tax returns, visiting regional tax and local government offices, as well as time spent on audits, and expenses for accounting software.