Armenia short of 200 billion drams in tax revenues in 2024 - Finance Ministry head

YEREVAN, December 25. /ARKA/. During a press conference on the results of 2024, Armenian Finance Minister Vahe Hovhannisyan stated that the inability to implement capital expenditures was due to a shortfall of 200 billion drams in tax revenues.

"In this regard, we tried to cut expenses to avoid additional problems," he said.

The minister added that the level of tax collection is in line with economic growth indicators. He explained that some projects were funded from the Reserve Fund.

"We had, if I am not mistaken, 130 billion drams in the Reserve Fund. This fund was mainly used for two purposes: addressing the housing issues of our compatriots forcibly displaced from Nagorno-Karabakh and over 50 billion drams as a fiscal buffer. At the moment, the remaining balance is about 30 billion drams," Hovhannisyan said.

Additionally, the minister mentioned that the expenditure portion of the 2025 budget is 150 billion drams less than planned under the government’s medium-term expenditure program. According to him, this is due to the government's focus on priority areas and its decision not to spend funds on ineffective programs.

As noted in the World Bank's Armenia Monthly Economic Update – November 2024, Armenia’s state budget surplus in September was 11.6 billion drams, resulting in a total deficit of 0.7% of the annual projected GDP.

In nominal terms, tax revenues, including income tax on mortgages, increased by 12.1% year-on-year in September. This was mainly driven by a rise in income tax (by 11.5% y/y), environmental tax (by 39.6% y/y), and profit tax (by 14.2% y/y). VAT grew modestly, registering a 3.9% year-on-year increase. The budget deficit for January-September 2024 was 73 billion drams, compared to a surplus of 74.6 billion drams during the same period in 2023 ($1 = 395.75 drams).