And so, two days ago the State Revenue Committee announced that during the first quarter of this year it was possible to levy a lot of revenue, more than anticipated – instead of 116.9 million AMD 126.7 billion was collected. As the official statement says the over-collection was registered due to the consistent efforts of the State Revenue Committee. Indeed we may try to understand the Committee as their job is to collect taxes and they have done it splendidly. But if in the aspect of the Committee the thrilling is quite much then we should think whether this was good for the economy. In general, if we get to judge the level of economy by only relying on the indices of the budget then it will turn out that we have not only overcome the crisis but have a more impressive dual-digit progress than in the past. It will only be enough to remember that last year in the first quarter the budget inflows have grown by 19%. This is an impressive figure, isn’t that? But this impression blinks on the background of unclearness after viewing the macro-economic data released by the National Statistics Service. For example, in January-February 2010 the country’s economy enjoyed 3.1% growth in January and February 2010, compared with the same months a year before. GDP in current prices amounted to AMD 321650 million, and the year-on-year GDP deflator index was recorded at 110.6% in January and February 2009. GDP growth is planned at 1.2%-2% in the 2010 state budget. Thus during the past three months the economy grew by 3-4% and the taxes – by 19%. At the expense of what has such a large amount of revenue collected? When reviewing the macroeconomic indices you not only do not get the answer to this question but get even more confused. During the first two months of this year the retail sale rates grew by 0.6%. Import of machines, equipment and devices grew by 87.4% year-on-year to $100.1 million, import of mining equipment grew by 27.4% to $97.4 million, import of overland, aerial and water vehicles rose by 11.5% to $57.2 million, import of finished foods fell by 0.3% to $42.3 million and import of non-precious metals and items fell by 14.4% to $31.3 million. In 2009 Jan.-Feb. Armenia’s foreign trade totaled $510.2 million. The volume of services didn’t change at all. Agriculture grew only by 2.7% and the construction sector dropped down by 3%. The industry sector has registered a more or less decent growth – 9.4% but it is not compatible with the increase of taxes – 16%. Let us mention that even the 9.4% growth cannot be considered significant growth. Food production was cut by 0/1%, drinks – 2.7% and tobacco – by 12.9%, textile – 21.7%, fine goods – by almost 2%. According to the official figures of the National Statistical Service, the consumer price index in the first quarter of this year was up by 8.4 percent from the same period in 2009, nearly twice exceeding a full-year maximum inflation target set by the authorities, being dragged primarily up by double-digit increases in the prices of various services, fuel and other consumer goods. Instead the mining rates have grown by almost 1.5 times but this has mostly happened at the expense of prices. Certain branches of metallurgy have even plummeted. For example, the exportation of molybdenum was reduced by 1% and ferromolybdenum – by 15.3%. Let us only mention that the tiny activation of the economy would hardly provide 19% growth of tax collection. Armenia’s foreign trade grew by 22.5% year-on-year to some 235.5 billion Drams in current prices or $625.2 million, the National Statistical Service reported. It said exports rose by 53.5% or 46 billion Drams ($121.4 million), while imports grew by 16.8% to 189.7 billion Drams ($503.8 million). The negative trade balance totaled 143.7 billion Drams ($382.4 million). According to the official figures, export of non-precious metals and items rose by 53% year-on-year to $46.3 million, export of mining industry goods rose by 4.3 times to $33.2 million, export of precious and semi-precious stones, metals and items fell by 9.2% to $15 million and export of finished foods grew by 25% to $14.7 million. This happened not only because the importation volumes have grown by 15% but because of the factor of the devaluation of the AMD. It means that the imported goods of the last year cost less last year than now expressed in the AMD. Thus, if we wrap up the abovementioned it will turn out that the base of the taxation of the economy hasn’t increased and mainly to factors conduced to the growth of the taxes – AMD devaluation and stricter tax administration. Of course by this the ratio of taxes/GDP is growing. By this we can brag to the international structures but in fact this doesn’t bring any use to us. There is also a question, which seems senseless at the first sight. Why do the state bodies rejoice with the over-collection of taxes? What makes them collect almost 10 billion more taxes than what has been planned if we are not trying to pressure the economic activation? The answer is more than simple. The state needs money. Moreover, it gradually needs more and more. The small increase of pensions and subsidies is only a fake chorus. In the coming years the state will appear in a worse shape and it will try to levy more taxes to fill not only the budget but international debtors. Before giving money the latter, luckily, “advise” our government levy more taxes. But it will not be able to fight the upcoming disaster. And the disaster will arrive when it turns out that the “Armenian world,” has neither economy, nor taxation base, nor taxpayers.
