The New Tax Code develops Mechanisms to reduce Corruption Risk

The Tax legislation is in “scattered” condition, there are many legal documents regulating the field, they have different legal power, and there is a necessity to have a coordinated Tax Code. The experts that worked on the elaboration of the new Tax Code said today at the meeting with the journalists.

“It is always expected to have a perfect code when elaborating such. As it is said, the best tax is the unpaid tax and a good interest rate, 0 rate. We have the same in this case,” Chairman of Armenian Association of SME Accountants Vahagn Hambardzumyan said smilingly and added that the code includes the strategic issue of tax collection as well.

Hoverer, in order to have a new Code, first of all we need to coordinate all legal regulations in one document. According to Mr. Hambardzumyan currently a great number of by-laws are operating, there are also official clarifications, but all these often include contradicting provisions.

Ms Teresa Daban Sanchez, IMF Resident Representative in Armenia said that in case the new Code enters into force, it will solve a number of important issues: expansion of tax collection, which will enable the state budget envisage higher costs, transparency, compliance with international standards in the tax field, and predictability of the field, which will greatly increase investment.

Paylak Tadevosyan, the President of “Taxpayers Rights Protection” NGO agreed with the aforesaid also talked about the weaknesses Code. In particular, about ensuring the same predictability. According to him there are no counterbalances and guarantees, that there would be changes over the time.

In reply to the question of journalist that one of the target areas of the Anti-Corruption Strategy is public revenue collection and whether the new Code provides for anti-corruption mechanisms to reduce corruption risks in the area, the experts noted that that one of the most important mechanisms is reduction of subjective participation, specifically communication of the taxpayer and the tax inspector is minimized.

Paylak Tadevosyan noted however that it is important to have mechanisms designed not only by the code, but also to apply them and that it is a different matter.

Details in the video.