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Revenue collection on the rise: prospects for large-scale capital investments discussed


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Acting Prime Minister Nikol Pashinyan chaired a consultative meeting to discuss the current status of budget exercise, tax collection-related issues and the 2022 draft budget.

Addressing the meeting, the Acting Premier said: “We are going to discuss the current status of budget exercise. We also need to start the 2022 budget drafting process. The budget affairs are not so bad in general; tax revenue is on the rise, and it is obvious that we will exceed the target for the second half-year; how much, it will be clear tonight.

Strange as it may sound, I see more problems in expenditures, since cost-effectiveness has been a serious problem in general, and we must think of institutional systems to solve this problem, considering that cost-effectiveness affects economic activity and is a major incentive for budget revenue.

What is peculiar in the current situation? In terms of budget exercise, we are in the middle of the fiscal year, but we are in for a new round in the political sense as we have made specific pledges during the electoral campaign. We have talked about large-scale capital investments, about building and upgrading hundreds of schools, kindergartens, dozens of water reservoirs, thousands of kilometers of roads, and we must honor what we have promised.

Seeing our determination and perseverance, business will take the measures necessary to achieve the proposed targets, because the government sets a political task, while the latter is being carried out by the private sector through tenders, in particular.”

The Acting Prime Minister singled out one topic that the government should address, if not today, then in the future. “We are talking about improving our public procurement system, in which we have done a lot of work. In the meantime, we have to think about what other reforms we should implement to make the public procurement system as efficient as possible, because by talking about spending efficiency, we first of all mean the efficiency of the procurement system. We need to understand how flexible and effective the procurement system is; how well it meets the political objectives we have formulated. And here we must develop specific mechanisms to propel processes more promptly,” Nikol Pashinyan said, reminding that at some point there was a talk about the institution of a general contractor, which could help speed up the decision making process.

We are facing other spending-related bottlenecks. I can see that there are many companies specialized in these matters. For instance, during a regional trip paid the day before I encountered a situation where a school building tender was announced, there was the necessary funding, there was a project, but the contractors had been involved in a litigation red tape for over two years.

It appears that in a border village, where a new school was supposed to have been built and commissioned, and where the old school building is actually in ruins, children are suffering simply because the two companies involved in the tender are caught up in litigation, due to which all planned operations and deadlines have already expired, and it is not yet known when the school will be built. I think we must have a mechanism or certain legislative and political regulations for similar cases, otherwise we will have to explain to the children why they are suffering at all, how come there is a project, there is funding, a competition has been announced, there is a winner, but the school is not being built.

If we do not take action, the new school will not be complete in the next 3-4 years. So there are such problems, and we have no right to allow delays like this any further. We must make such decisions as would get the expenditure side more efficient,” Nikol Pashinyan emphasized.

The meeting next discussed economic developments, steps to boost tax revenue, capital investment, ways of attracting high-quality and higher added-value investments. Several proposals and recommendations were voiced during the exchange of views that followed.

Reference was also made to the possibility of introducing a universal declaration system, the measures to simplify and modernize regulations in the field of procurement, the developments in the construction sector. In particular, the meeting discussed the need for zoning in the framework of the income tax refund program.

Nikol Pashinyan stressed the importance of taking consistent and purposeful steps in the above directions. The Acting Prime Minister stressed that the government should make the policy of stimulating the economy more effective by providing real opportunities for businesses to enter new markets.

Nikol Pashinyan instructed those responsible to start work on attracting relevant organizations, including from abroad, in tenders announced for construction of schools, kindergartens, reservoirs, roads, as well as to present the necessary legislative decisions in the field of procurement.

The Acting Premier called a particular challenge the need for ensuring quality performance and introducing appropriate standards during construction activities.

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