High-Level Summary Technical Assistance Reports

This paper presents a high-level summary technical assistance report on Republic of Armenia’s review of tax expenditures. The Summary Technical Assistance Report series provides high-level summaries of the assistance provided to IMF capacity development recipients, describing the high-level objectives, findings, and recommendations. Supporting the authorities’ objective to consolidate revenue, this technical assistance report assesses tax expenditures in Armenia. The report covers major tax expenditures related to the value-added tax, excise taxes, the profit tax, and the personal income tax. With total estimated tax expenditures in excess of 5.5 percent of gross domestic product in 2021, streamlining preferential regimes, exemptions and incentives has strong potential for boosting revenue while improving the equity and efficiency of the tax system. The micro-entrepreneur regime could be repealed to subject those enterprises to the turnover tax. The income tax exemptions granted to public caterers, free economic zones and securities could likewise be repealed.