In 2009, communities collected property tax revenues 3.5bn AMD more than in 2008, RA Vice-Premier, Minister of Territorial Administration Armen Gevorgyan told a press conference.

“Still, I am not satisfied with the situation, there are great hidden reserves in this sector,” Gevorgyan said. Much can yet be taxed – for example, entertainment tax can be introduced, he said. In any case, Gevorgyan said, relatively satisfactory tax collection by local budgets enabled them to pay off arrears of wages accumulated since 1996. So the arrears have been reduced from 2.3bn AMD in 2008 down to 866m AMD.

Minister Gevorgyan reported that the tax revenues collected by local authorities constitute 42% of the total revenues of community budgets. “The reason is very low tax rates. An owner of 1,000 sq meters of land in the center of Yerevan pays an annual tax of 25,000 AMD. Tax rates have remained unchanged since 1994, when they were introduced. But we do not want to raise them so as not to create social tension,” Gevorgyan said.

To improve local tax collection, the Government proposed a number of initiatives. Specifically, the standing committees of the RA Parliament are considering a bill on a single land and property tax. “If we manage to enforce it from 2011, the situation will improve,” Gevorgyan said.

The Minister also reported that the RA Ministry of Territorial Administration intends to appraise the work of regional administrations. “I can say that the work of none of the heads of regional administrations has yet received an unsatisfactory rating. But we will sum up this February,” Gevorgyan said.

T.P.