Azatutyun.am. Tax authorities have called for the effective abolition of banking secrecy in Armenia, citing the need to further complicate tax evasion.
Under a bill drafted by the State Revenue Committee (SRC) and circulated late last week, SRC officials would no longer need permission from courts to access information about bank accounts of individuals suspected of engaging or assisting in tax evasion.
In an explanatory note attached to the bill, the SRC says that many Armenian entrepreneurs divert a large part of their revenues to personal bank accounts of their relatives or employees to pay less taxes. The practice, it says, is commonplace in business activities such as trade in household goods, production of precious stones and metals, information technology and tourism.
“Without keeping track of banking transactions of those individuals it is almost impossible to detect the underreporting of revenue through such schemes,” reads the document.
Read also
The proposed bill, which has yet to be discussed by the Armenian government, has prompted concern from some businesspeople. They say that it would scare away local and foreign investors.
“It may make the work of the SRC easier but it would also throw business activity into crisis,” claimed Vahram Mirakian, the head of the Mantashiants Business Association.
“We would have to forget about investments,” Mirakian told RFE/RL’s Armenian Service.
The SRC on Wednesday declined to comment further on its initiative. The document posted by it on a government website argues that in countries like France and Germany commercial banks are legally required to share information about client accounts with tax authorities.
Banking secrecy in Armenia was already somewhat eased in 2020. A government bill approved by the parliament allowed tax and law-enforcement bodies to seek financial information about not only bank clients accused of crimes but also people linked to them.
The bill was actively promoted by Rustam Badasian, the current head of the SRC who served as justice minister at the time. It was criticized by opposition lawmakers and the Union of Armenian Banks.
