On August 19, U.S. Ambassador Richard M. Mills, Jr. visited the IT Infrastructure Development and Implementation Department of the Armenian Ministry of Finance in the company of Deputy Minister Vakhtang Mirumyan. The Ministry has recently procured up-to-date hardware and software for its data center in Zeytun as part of USAID’s technical assistance to the Government of Armenia to modernize the country’s electronic tax administration system.
During the visit, Deputy Minister Mirumyan gave an overview of the current tax policy of Armenia, highlighting the recent achievements resulting from the Ministry’s collaboration with USAID. Michael Pashayan, the head of the Ministry’s IT Department, presented details about the Integrated Revenue Administration System, which was automated through USAID support. The fully automated system reduces tax distortions, opportunities for corruption, and the number of errors. If errors do occur, the automated system facilitates their identification and correction. Thanks to the Ministry’s efforts, the time spent on tax compliance by businesses was reduced by 36 percent over the last six years, and the number of taxpayers using the electronic services for filing also increased significantly from 7 percent in 2011 to nearly 95 percent in 2015.
Ambassador Mills noted that the modernization of the tax administration electronic system has increased the transparency of the tax authorities’ operations. He commended the Government of Armenia for these important successes, which have allowed Armenia to achieve a 32-step improvement in the ‘ease of paying taxes’ rankings of the World Bank Doing Business Report for 2015, rising from the 73rd place in 2013 to 41st place in 2014 among the 189 countries surveyed. Noting the positive effect that transparent tax regulations and administration have on business development, Ambassador Mills expressed hope that Armenia would continue to improve its business environment to stimulate economic growth and attract foreign investment.
USAID programs have supported the Ministry of Finance of Armenia with the implementation of reforms that have helped to improve the taxation of small businesses, equip and train regional taxpayer service centers, simplify tax investigations and value added tax (VAT) refunds, and improve the tax audit planning and selection system. USAID has also assisted with the establishment of the Tax Council – a new public-private platform for the Government and the business community to discuss tax issues.