By Atom Markarian
President Robert Kocharian promised over the weekend a sweeping overhaul of Armenia’s notoriously corrupt customs, saying that its failure to act in a “civilized and lawful” manner is hampering economic activity.
In remarks broadcast by state television, Kocharian said he has been told that senior officials from the State Customs Committee and other government agencies are helping large-scale importers avoid taxes in return for kickbacks. He said he has ordered the presidential Oversight Service to investigate those reports.
“If everything is done in accordance with the law and methods applied in the civilized world, then I am sure that we will get a very positive result in terms of spurring business,” Kocharian told the management of the Customs Committee.
Customs administration is a major source of complaints from Armenian businessmen. Many of them routinely accuse customs of abusing their controversial legal authority to determine the market value of imported goods and giving preferential treatment to their cronies. However, they rarely voice such complaints in public for fear of government retribution.
An Armenian company importing coffee became an exception from this rule last July when it claimed to have been illegally penalized for refusing to pay bribes to customs officials.
Kocharian admitted that “a lot still needs to be done” to ensure fairness and equality in the collection of import duties. He said the customs offices on Armenia’s main border checkpoints will face particularly close scrutiny from his oversight body.
The public criticism is a further blow to the credibility of Armen Avetisian, head of the Armenian customs. Avetisian is widely seen as a protégé of powerful Defense Minister Serzh Sarkisian. His conspicuous personal wealth has long raised eyebrows in the impoverished country.
Kocharian also said that as well as operating properly, the customs must ensure its share of a sizable increase in the government’s tax revenues planned for this year. Armenia’s 2005 budget envisages a 25 percent rise in public spending. This means that the government’s customs and tax departments must together raise an extra 53 billion drams ($110 million).
Kocharian had earlier called for a tougher government stance on widespread tax evasion. Meeting with a large group of entrepreneurs on December 27, he claimed that they will not get away with underreporting their revenues anymore.
“Our employers are hiding [earnings] in such volumes that do not fit into any reasonable boundaries of decency. Be aware that there will be no concessions to anybody on this issue, and we will start from [dealing with] those persons that are in the public spotlight,” he said without naming names.
Some of those businessmen are believed to be close to Kocharian and Sarkisian.