YEREVAN. - Economic activity in Armenia in the 1st half of 2015 didn’t translate into growth in VAT or profit tax collection, Mr Mikayel Melkumyan, member of the Armenian Parliament and Prosperous Armenia party, told Armenian News – NEWS.am.

Melkumyan, who is also the Deputy Head of the Parliamentary Committee on Economic Affairs, pointed out that though the economic activity index of Armenia in the first 6 months of 2015 was 4,2%, it mainly rested on agriculture (15,3% growth), where the vast majority of taxpayers are farmers (with agricultural produce far below the VAT threshold) and mining (35,5% growth), which is subject to royalties, hence the growth in the latter being 9,8%.

On the other hand, VAT and profit tax receivables declined by 5,7% and 3,7% respectively.

Other businesses which do pay profit tax are seeking to dilute the tax base by all legal means to weather today’s economic difficulties and uncertainties. To that end, they try to book expenses as those deductible from profit tax base, Melkumyan said.