YEREVAN, JUNE 8, NOYAN TAPAN. The main source of increasing tax revenues in the coming years is improvement of tax administration, deputy head of the RA State Tax Service Armen Alaverdian said at the June 8 press conference. "Tax rates are "most loyal" in Armenia," he noted. According to him, VAT is at the medium level by international standards, while social payments and income taxes are quite low. In his words, the 2007-2009 three-year program on development of the RA tax system is a serious bid to create a sufficient basis for fulfilment of the indices envisaged by the medium-term expenditure program in the coming years. A. Alaverdian said that in 2002, tax bodies collected taxes of 104 billion drams, while as of June 1, 2007, this index made 103 bln drams (in the year 2006 - 221 bln drams). According to him, it is conditioned by two circumstances: economic growth and reduction of the shadow sector. Tax bodies envisage to collect 280 bln drams this year. It was mentioned that 135 thousand tax payers are registered in the country, with only half of them operating. Out of this number, 217 are big tax payers that pay 70% of all taxes, 26 thousand tax payers pay simplified tax. A. Alaverdian said that the use of tax mechanisms is imperfect with respect to some services: for example, a taxi pays only 6 thousand drams a month. There are shadow sectors and and it is obvious that these are profitable sectors. Reluctant to name a concrete sector, A. Alaverdian only said that these are mostly importing businesses. In his opinion, provileges to foreign investments, diamond cutting and jewelry sectors should be reduced or abolished. According to him, subjects operating in Yerevan trade fairs should make fixed payments, while the management or organizer of a fair should be taxed separately. Last year the fairs paid taxes of a total of 2.5 bln drams.

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