Armenia's tax-to-GDP ratio may reach 25% in 2026 – Finance Ministry

YEREVAN, June 9. /ARKA/. Armenia's tax-to-GDP ratio may reach 25% in 2026, Finance Minister Vahe Hovhannisyan said.

"We will try, if not to reach, then to come very close to the target indicator. We did not try to achieve our goal in any way that would have a negative impact on our business entities and did not exert pressure in administration, did not increase taxes. We had deferred tax liabilities, including in the construction sector," he said in parliament on Monday during a discussion of the report on the implementation of the Armenian state budget for 2024.

Earlier, the Chairman of the Central Bank of Armenia Martin Galstyan stated that tax revenues in 2024 increased by 5.1% compared to 2023, while the tax-to-GDP ratio decreased by 0.5 percentage points and amounted to 23.6%. According to him, the tax-to-GDP ratio was 1.3 percentage points lower than the planned figure for the year, falling short of the medium-term target.

Hovhannisyan stated that the reduction in the tax-to-GDP ratio was due to certain structural changes in the economy, particularly in the export sector.

The head of the State Revenue Committee of Armenia Eduard Hakobyan, in turn, named the time lag as one of the reasons for the reduction in the tax-to-GDP ratio. The banking system and the construction sector had high growth rates, taxes from which will be received by the budget this year. He also reported that in terms of funds collected by tax authorities, the growth in 2024 was 11.2%, which exceeds the rate of economic growth, and in terms of customs, there was a decline of about 15%. This, according to him, indicates some problems at the border, which are objective. "Basically, we are talking about a reduction in the import of cars and cigarettes," Hakobyan said. At the same time, according to the head of the department, about 142 billion drams in taxes were collected in January-May 2025 (an increase of 14.4%). -0-