Armenia’s State Revenue Committee (SRC) today stated that it has recovered 1.640 billion drams ($3.381m) in tax revenues lost via tax violations (tax evasion, improper accounting, low wage records, etc.).

Vahan Charkhifalakyan, who heads the SRC’s Investigative Unit, stated that in the first seven months of this year 1,750 investigations were carried out and 731 violations were uncovered, amounting to some 2.8 billion in tax liabilities.

In comparison, 1,450 investigations were carried out in the same period last year, resulting in 567 violations amounting to 431 million drams of tax liability.

The official said that one of the most widely used mechanisms to avoid paying tax is to spread a company’s revenues across a number of linked businesses, that are registered in the name of friends and family, that enjoy more favorable tax rates.

Charkhifalakyan said that many of the audits are carried out in secret, without the knowledge of the business owner.  

"For example, if we know that the real beneficiary of two economic entities is one person, and conditionally organizes two clothing trade centers, we make a control purchase from one store, then we transfer the purchased product to another store, replace it in the second store. Or let's say we get a discount card from one store, we use that card in another store. These are just a few of the many pieces of evidence," said Charkhifalakyan.