Oligarchs ‘Ask’ And Get

OLIGARCHS ‘ASK’ AND GET
JAMES HAKOBYAN

Story from Lragir.am News:

Published: 11:38:44 – 17/11/2011

One of the upcoming key concerns of Armenia is those additional
collections of 101 billion drams which is stipulated in the draft
budget for 2012. The government intends to boost revenues while the
National Assembly majority will naturally confirm the intention of
the government because it stems from the pre-election logic.

The civil society, experts and entrepreneurs, especially SMEs wonder
from who those 101 billion will be collected. The government assures
that it will not lie heavily on the shoulders of SMEs and will be
collected from major companies. However, business does not believe
these words because it knows, it has experienced what happens in
reality, beyond the oral or even written assurances of the government.

Nevertheless, in this situation the answer of the government is
interesting from another aspect. Whenever it is stated that additional
taxes will be collected from major businesses, two questions arise:
what major business means and what it means to collect taxes from
major businesses.

For instance, the State Revenue Committee publishes the list of 1000
major taxpayers or 300 major taxpayers. And if Armenia has so many
major businesses, isn’t it a surprise that the budget hardly amount
to 3 billion dollars?

Apparently, it is necessary to review the criteria defining a major
taxpayer because successful SMEs often fall under this category and
get caught in the so-called “terminological trap”, and are measured
equal to major businesses and unlike the latter they sustain losses.

And what does it mean that taxes will lie on the shoulders of the
major businesses? Generally, business is taxed, be it major, medium
or small. Simply every business must be taxed in the amount provided
by the law.

Consequently, the response of the government must be enforcement of
the legislative provisions, taxing much from major ones and taxing
little from small ones. And a primitive judgment but an essential
detail: ensuring reference to the law. The government must refer
to the law because when it says the major businesses will be taxed,
even if it supposes a legislative framework, the situation remains
blurred because the notion of major business is blurred too.

And in the case of reference to legislation responsibility becomes
a little more definite. The law provides for tax liabilities, and
additional 101 billion must be collected in the result of performance
of tax liabilities laid down in the law for all businesses.

After all, it is not a secret that being the owner of a major taxpayer
company, one high-ranking official or another downsized their companies
under their tax and shade tactics.

Consequently, the problem is not the size of business but the
imperative of elimination of arbitrary enforcement of the law because
even when the government begs the oligarchs to give some money rather
than tax them in accordance with the law, the oligarchs ask something
in return for the money and as a rule they get what they want.

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