YEREVAN, JUNE 30, NOYAN TAPAN. The government has launched reforms of tax and customs services, and its goal is that these services will create minimal problems for the business community. This presupposes the definition of simple and exhaustive requirements and rules, the conduct of a limited number of efficient checks, and ensuring the transparency of activities. The work of tax and customs services should compensate for the difficulties that the Armenian businessman encounters in the region in connection with relatively high expenses and other obstacles. As NT correspondent was informed by Narine Mailian, executive director of the Small and Medium Business Foundation nonprofit organization, as long ago as March 31, 2008, the consultation held by then prime minister Serge Sargsian with the participation of representatives of small and medium business and NGOs initiated the participatory process of improving the customs and tax legislation and administration. On the initiative of the RA ministry of economy, meetings were organized with representatives of big, as well as small and medium business and organizations representing their interests at the Union of Manufacturers and Businessmen (Employers) of Armenia and the Small and Medium Entrepreneurship Development National Center of Armenia Foundation (SME DNC) in April. Then a number of other meetings took place, including with the participation of the president. During the meetings, a number of problems were raised concerning "businessman-state structures" interrelations, ensuring an equal competitive environment, and improving the tax and customs administration and in general, the business environment in the country. In the opinion of N. Mailian, the Armenian businessmen respond positively to the measures undertaken by the government. According to her, as a result of the change made in the customs-house work in the past month, entrepreneurs have the opportunity to declare themselves the imported goods. The Customs Code has allowed doing so since 2002, but until now it has not been used in practice. The reason was the disagreement between businessmen and customs officials over the customs value of a commodity, which would be resolved through "negotiations". The necessity to meet and "negotiate" with customs officials was removed after the Armenian president Serge Sargsian had instructed to put the data on the customs values of goods on the website of the State Customs Service. In the words of N. Mailian, the entrepreneurs accepted with satisfaction the new style of the customs-house work but they also have some fears: is it going to be continuous and may the old working style resume in a while? As for the problems of the tax service, N. Mailian said that if the government succeeds in implementing the planned reforms in the sector, it will significantly improve the business environment of the country. Tax sector reforms are more complex. In particular, it is necessary to make a number of legislative amendments. The problems identified through discussions have found their reflection in the drafts "The Seven Major Purposes of Tax Administration in the RA" and "The Tax Administration Policies in the RA based on the Seven Major Purposes" which were developed by the State Tax Service adjunct to the RA government and again presented for public discussion. The "seven purposes" declared by the State Tax Service in particular include "the use of "soft administration" with respect to small entrepreneurship". In the opinion of N. Mailian, the imperfect system of classification of small and medium entrepreneurship may become a serious obstacle to the current reforms. In Armenia, enterprises are classified as small, medium or big by the number of employees, without taking their turnover volumes into account. According to this classification, 80% of Armenian industrial enterprises are either "very small" or "small". Therefore, the use of "soft" administration in practice will be greatly conditioned by the introduction of a more subtle system of enterprise classification. Nevertheless, as N. Mailian said, the businessmen are optimistic about the expected reforms. One pledge of this optimism is that prior to taking certain steps, the government carefully discusses these steps with the business community.

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