Financial disclosure in the country has until now been mandatory only for senior state officials and members of their families. A law enacted by the Armenian government just over two years ago essentially extended the legal requirement to all citizens. The government said this will further complicate tax evasion and make it easier for the authorities to identify people who are really in need of government aid.
The more than 700,000 Armenians who have jobs or businesses registered with tax authorities have to submit such income declarations electronically by May 1. They must report not only their wages but also remittances or other cash donations not exceeding 300,000 drams ($750) per transfer. Officials have assured people that they will not end up paying more taxes.
But as the legal deadline approaches, there are growing complains from ordinary taxpayers about a lack of clarity in the disclosure procedures. The fact that the electronic filing system created by the State Revenue Committee (SRC) is still not functioning properly is adding to the discontent.
Pashinian acknowledged “widespread tension” caused by the measure and sought to address it during a weekly cabinet meeting in Yerevan. He insisted that his government is seeking to minimize misuse of public funds earmarked for social programs, rather than increase its tax revenue. And he again said that some of the citizens eligible for poverty benefits, tax breaks or other aid have substantial incomes hidden by them.
For his part, Deputy Finance Minister Arman Poghosian said: “The most important goal is to introduce a comprehensive system of registering people so that the government gets to know citizens, their financial status and social needs better and comes up with fact-based policies and uses targeted tools.”
Opposition lawmakers remain critical of the universal income declaration system, saying that it is cumbersome and will not serve the declared purpose. They are also unconvinced by the government assurances that the tax burden on the country’s population will not increase as a result.