The RA government has recently done a small but a positive step to relieve the state bureaucracy. It has by one step reduced the “long” way that the businessman should go through for registering his business.
Any legal or physical entity before starting a business was supposed to go to a state register; get registered, receive a certificate and a month after that ought to go to the tax service and get his certificate and registration number. Let us explain the ones, who don’t deal with the tax service, that the registration number is an 8-digit number, which is inscribed on the stamp. In other words it is the passport number of the entrepreneur, which is necessary for all kinds of transactions – payments, transfers, receiving a credit, etc. It means that without this number the businessman is not able to do anything. The starter of a new business gets introduced to the pleasure of communicating with the tax inspection for the very first time when he goes after the registration number. He makes the necessary payment, writes a letter of request and fills in 3-4 blanks and visits the tax service one more time to receive the tax bar code. After having this number he orders a stamp but this is a separate theme. Now the government has decided to facilitate the way of the newly started businessmen. And from now on they are not required to visit the tax service for this purpose. Thus, RA government has considered its previous 2 decisions outdated and invalid by enabling the new businesses receive their registration number at the state register instead of the tax service in parallel with the registration process. “For the purpose of the organization of this process the tax service has allowed to use its automated mode. So the registration and provision of the registration number is going to be done by a single body,” reads the website of the government. Annually 10.000 people will benefit from this because according to the deputy-chair of the State Revenue Committee Rubik Kocharyan annually about 10.000 businesses get registered in Armenia. During the conversation Kocharyan informed the journalists that the taxpayers will be exempted from administrative penalties. “There was a norm that during one month the taxpayer was supposed to go to the tax body and get registered. In the event of not doing so he would be fined and brought to responsibility. This is also excluded from the law.” He also mentioned that the process may take a day if all the necessary documents are presented. Software will exist, which will input the data and the documents in the database, after which the number will be mechanically provided. Let us mention that according to the accountants the change as itself is a positive step but many of them don’t understand how the state register will be able to provide a number within 1 day because of technical inabilities. “In the tax service they fill in 3-4 papers with various data. 3 days are needed to elaborate these data and provide with a registration number. It turns out that the State Register will take on the function of the Tax Service and suggests doing its faster, which is not quite realistic,” say the accountants. Others go a little further in their assumptions by forecasting that the state register will give a formal 8-digit number and after that when the taxpayer gets to deal with the tax service he will be “tortured” by being made to fill in thousands of papers. So the abstruse process is not cancelled but prolonged for some time. Even if we assume that our pessimism is not justified we shouldn’t overestimated this step of the government. In the release describing the government session this initiative is described as improvement of business conditions. In the meantime we all know that in Armenia the registration of the business is easier than doing business (in the aspect of dealing with state bodies) and especially closing of the business. The Doing Business 2010 report of the World Bank also witnesses of the above-mentioned. So in terms of starting business Armenia occupies the 21st place among 183 states, which is a pretty good rating. But in doing business rating we occupy the 43rd place and in terms of shutting down the business – in the 49th place. Let us add that the state registration number is a necessary but not a sufficient condition for starting a business. The enterprise that consumes products or offers services should have a book of distributions, which should be approved by the tax body. And in cases when the consumption venue doesn’t belong to the taxpayer and he rents the venue this process turns into a real headache. The taxpayer should go to the cadastre, take a note, which states that the area is not under mortgage or confiscation; then he should go to the notary bureau and confirm the rental contract. Then he should go back to the tax service, write a request letter and wait till the tax inspector would visit and see with his own eyes and only then take the distribution book. Moreover, if the entrepreneur is developing his business and expands the number of sale points he gets to go through the same process several times at the expense of his nerves, money and time. So such initiatives of facilitating the bureaucracy are necessary not only before the start of business but during it as well. Otherwise these rumors turn into spark that later cause disappointment and frustration among the businessmen and they appear in the spider web of bureaucracy.