Every year, the Armenian government is busy devising ways to make tax collection more “efficient”

By tightening the procedures and turning the bureaucratic screws, the government is extracting an additional 15 to 17 billion AMD ($40 million U.S.) per year in taxes. So in essence, the government is collecting $40 million more in taxes than the year before.

But the government hasn’t exhausted all the administrative levers at its disposal to increase tax revenues. One just has to look at the list published today by the State Revenue Committee of the 1,000 largest taxpayers for the 4^th quarter of 2013 to get an idea of the scope of tax evasion in Armenia.

In second place on the list is HayRusGazArd with its 36 billio AMD in paid taxes. Only 3.5 billion is actual tax (profit or income tax). The gross annual revenues of the company are around 2 trillion AMD ($5 billion U.S.) Let’s assume that the company operates on a 10% profit margin. Thus, profits amount to 200 billion AMD. In other words, it turns out that the company is paying a tax rate of 1.75%.

Talk about tax evasion...

The Aleks Grig company, associated with Samvel Aleksanyan, who enjoys a dominant position in the sugar, cereals, vegetable oil and flour market, and who owns the Yerevan City chain of supermarkets, paid 18.7 billion AMD in taxes, coming in a fourth place on the list. Only 1.6 billion is actual tax. Company yearly turnover amounts to 1 trillion AMD. Thus, here too, the profit tax rate being paid is a measly 1.5%.

The Flash Company, a leader in the gasoline sector in Armenia, comes in 6^th place on the list with 11.4 billion AMD in taxes paid; of which 890 million is actual tax. With yearly revenues of 600 billion AMD, the company is only paying 1% on its profits. The other gasoline leader, CPS Oil, is only paying .5% on its profits.

I can go on and on. We will, in future, point out other companies paying even lower tax rates.

And I’m sure the officials at the State Revenue Committee are fully aware about the disparities.