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On May 31, the preliminary discussions on the annual report on State Budget Execution of the Republic of Armenia for 2021 has begun at the joint sitting of the Standing Committees of the National Assembly.

The RA Prime Minister attended the discussions. He informed that the economic growth indicator of 2021 was more than it was expected by 5.3%. From the beginning, it was predicted 3.1%. The revenue budget was overfulfilled by 147 billion AMD in the reporting year, that is, the state budget received 147 billion AMD more money.

“We had an unprecedented ratio in the history in terms of the taxes-GDP, when we recorded 22.7% of gross domestic product in the form of tax revenues. We have a task to increase that figure to 25% in the medium term. Of course, it will not be easy against a background of reducing tax rates, but we should try to resolve that problem,” the Prime Minister noted in the context of tax policy.

Nikol Pashinyan also said that 146 billion AMD of value added tax (VAT) was returned to the economic entities in 2021. It was mentioned for comparison that the return of the VAT was 60 billion AMD in 2017. “In 2021, there was no application from taxpayers for the return of debit money, for which the amount was not actually returned,” the Head of the Government underlined. As a result of the legislative amendments, now the VAT is returned to the economic entities on a monthly basis.

“As of January 1, 2018, the Government owed the economic entities 125 billion AMD of the VAT debit money. 50 billion AMD of that money was “desperate money”. “When the new Tax Code was adopted in 2017, the Government said that the they put aside their previous debts and would not address them. In 2019, when we were already exceeding the budget revenues, we decided to return the overdue VAT debits, which had accumulated since the first days of independence. That is, it in fact was a “desperate debt”, which we returned to the economic entity,” the Prime Minister said.

Nikol Pashinyan noted that they could not have done that, but they considered that the authority of the state is the most important, and it cannot be the case that the state takes money from someone and does not return it. At that time, the state planned to return 56 billion AMD, but it actually returned 42 billion AMD, as many companies were liquidated during that time. He emphasized that now there is no problem that has existed in Armenia for 30 years. If there is a debt of VAT debit, it means that the economic entity has not managed to submit application to receive it within a month yet.

The Prime Minister highlighted the reform of the income tax, noting that as a result of it, now the citizens pay 21% income tax.

The Head of the executive body also referred to the other implemented reforms and current economic indicators, considering them optimistic.