Over a Third of Armenia's Economy Gone Missing
Where is Armenia's economy? Well, to hear the World Bank’s country chief tell it, more than a third of the economy is closeted away in a world impervious to accounting and tax collection. Light must be shed on the shadow economy for Armenia to make ends meet, Airstomene Varoudakis said at a June 18 press conference.
“It is a very important challenge to formalize this informal economy so as to increase tax revenues and be able to pay for much-needed social services,” he said.
Armenia’s government described poor tax administration as one of the weakest spots in its economic stewardship and promised a massive overhaul of the system. That would mean a “softer” regime for business owners and fewer encounters with tax collectors.
Varoudakis said the World Bank will provide $25 million to underwrite the reform. The World Bank, IMF and Russia have provided hundreds of millions of dollars in economic aid to blunt the effects of the global financial crisis, a sharp decrease in foreign remittances and bust of the country's construction bubble.