Contributing to the fight against tax fraud in Armenia

Following a mass popular movement called the “Velvet Revolution”, the new Armenian Government developed a national strategy based on transparency in public administration and the fight against corruption. The actions of the Armenian tax administration, via SRC, are increasingly highlighted and the issue of identifying and reducing the grey and informal economy is at the heart of the national debate.

In this context, the Armenian Government has called on France’s support to address these challenges in response to citizens’ expectations.

Optimising the mobilisation of domestic resources and fighting against the informal economy

The project to support the Armenian tax administration (PAAFA) is a EUR 450,000 technical assistance project implemented by Expertise France in the context of the EUR 40m of budget support provided by AFD to support the country’s reforms to revive the economy.  

The project was launched in July 2019 for a period of 18 months and aims to implement capacity building activities to optimise the mobilisation of domestic resources and fight against the informal economy in the context of SRC’s strategy for 2020-2024 (analysis of the informal sector, increased mobilisation and analysis of information, support to the private sector, greater transparency in the gambling industry and communication among Armenian taxpayers).

Laying the groundwork for the strategy

For four days, two groups of experts discussed French and Armenian experience in the fight against international tax fraud and in risk analysis and big data systems.

This work has laid the groundwork for two major projects that the Armenian tax administration will be undertaking in the next few months. The first concerns the preparation and validation of a plan to fight against international tax fraud, procedures manuals for the analysis of requests, as well as a training plan for auditors and investigators from the State Revenue Committee. The second involves strengthening and developing information technology tools to enhance the database of the State Revenue Committee (big data) via the integration of risk criteria and computer data modelling.

The two working groups will prepare the recommendations, strategies and training plans to put in place and have them validated by the Chairman of the State Revenue Committee, Davit Ananyan.

A study on the informal economy in Armenia

Alongside these projects which aim to mobilise and analyse information, Expertise France and the State Revenue Committee are working closely on the finalisation of a study to measure the shadow economy in Armenia, thanks to the expertise of Jacques Charmes from the French National Research Institute for Development (IRD). This nationwide study will allow the Armenian administration to better understand and analyse the phenomenon of the informal economy in order to improve the mobilisation of domestic resources.