Rapid Response to COVID-19 Economic Challenges in Armenia

Adrienn Juhász's picture
Published by:

The coronavirus epidemic posed an unexpected challenge to both the world and Armenia. In addition to huge healthcare problems, economic and social challenges emerged. During the epidemic, significant sectors of the economy were forced into inactivity, thus complicating tax collection for the country. In this situation, the State Revenue Committee of the Republic of Armenia (SRC) was able to set the right priorities in the difficult process of securing tax revenues. As a result of the steps taken, it is predicted that the program indicators of state revenues will be exceeded by about 40 billion drams.


Management and neutralization of COVID-19 "tax threats"

Quick and effective response to new challenges. This is how the State Revenue Committee responded to the "economic threats" of COVID-19 in Armenia. In order to flexibly manage possible developments in the tax field, and to find solutions to the difficulties created for the business sector, a council was established to coordinate the work of solving tax and customs compliance issues and risk management. As a result, on the basis of successful approaches in international practice, practical steps have been taken to solve the problems set by the State Revenue Committee through the efficient use of resources.

On the one hand, COVID-19 has caused many difficulties in the business field, and on the other hand, created an opportunity to evade tax obligations. Therefore, the purpose of the established council is to identify similar risks of tax and customs compliance, to assess and manage correctly. In separate directions, under the direct control of the council, measures were developed and implemented.


Transformation of services from paper-based to electronic

"Coronavirus reality" dictates a new scope of partnership with business. The best solution is to transfer paper-based transactions to an electronic platform, which was immediately organized by the State Revenue Committee. Following the spread of the coronavirus, the committee reduced the paperwork submission by taxpayers to the State Revenue Committee. Automation of taxpayer services is ongoing. The SRC Taxpayer Service Department, together with other departments, continues to collect data on the needs of taxpayers. Everyone is provided with information support, and also the appropriate service.


Decreasing of the tax burden with legislative solutions

The State Revenue Committee also supported those taxpayers who delayed their tax payments during the year. The law stipulates that the penalty for overdue tax liabilities is calculated at 0.04% instead of 0.075% for each overdue day and the threshold for unfulfilled tax liabilities defined by the RA Tax Code has increased from 500 thousand drams to 1 million 500 thousand drams. Besides, due to the state of emergency declared in the country, it was decided to support the taxpayers for an indefinite period: if the sum of the taxpayer's outstanding tax liabilities does not exceed 1.5 million drams, then no compulsory enforcement actions would be carried out against him, in particular, within the framework of administrative proceedings initiated in the tax administration no collection decisions would be made, and no blocking actions would be carried out. Moreover, no administrative proceedings are instituted on the basis of non-payment of newly incurred liabilities of up to 1,500,000 drams.


The SRC-business communication

The State Revenue Committee has intensified communication with businesses during the epidemic by creating a new platform and improving the developed PR tools. A section entitled as “COVID-19” has been set at the top in the official website, which contains operative-explanatory information on the measures of taxpayer support during the epidemic, on the peculiarities of the activities of the tax and customs bodies in the format of news, articles and animated videos. For businesses was created an FAQ section with its answers. Also, the noteworthy data are presented in infographics. The contact with businesses is conducted through modern communication tools, including SRC official accounts on social media. Building trust-based communication with businesses is especially important during the coronavirus epidemic.