Armenia’s government plans to take a number of actions to improve positions in WB’s Doing Business report

YEREVAN, MAY 7, ARMENPRESS. Armenia has planned to take a number of actions to improve its business climate and positions in the World Bank’s Doing Business 2020 report. A great attention will be paid to the construction permissions, recognition of bankruptcy and payment of taxes, which are still at low positions in the report, but have a great potential for improvement.

Deputy minister of economic development and investments Albert Babayan introduced the expected actions.

““Improvement of the Business Environment” 2019 Action Plan, which was approved by the government in April, aims at improving the business climate and outlining the actions for 2019 which should be carried out for the assessment in the World Bank’s report. The WB report assesses actions being implemented at 10 directions, and from this perspective the actions cover all these directions. 51 actions will be taken. There are three indicators in Armenia which have a great potential for improvement, in other words, they are in low positions. These are the construction permission, recognition of bankruptcy and payment of taxes. In the report the construction permission is ranked 98th, bankruptcy – 95th and taxpaying – 88th. By cooperating with the World Bank experts we also must completely revise the construction permission process. An electronic system for construction permissions will also be introduced which will accelerate the process and raise the level of transparency”, he said.

As for bankruptcy, the main problem with this in Armenia is the following: enterprises, which face financial difficulties, are often dissolved, and in this regard the creditors are unable to return back the money they have provided to that enterprise. But the methodology says that the enterprise should continue its life, should improve financially, and the recovery rate will be high. The deputy minister said the actions in this regard will be focused on improving the financial condition and protecting the interests of maximally secured creditors.

Armenia’s low positions in terms of payment of taxes are conditioned with the elimination of VAT debt remnants. “These sums started to be returned since the second half of 2017. And we expect to have a great progress from the assessment perspective”, Albert Babayan said.

The World Bank not only focuses on the fact what reforms have been carried out by the state agencies, but also to what extent they became applicable in the private sector. The report also assesses the country’s legislative field to see to what extent it is directed to providing opportunities to improve the organizations. Given this the Armenian government also plans to make large-scale changes in the legislation. Albert Babayan added that taking into account this and a number of other changes, their estimates show that Armenia has great chances to come closer to the top 20, even top 10 countries of the 2020 report.

Armenia has improved its positions in the World Bank’s 2019 report by 6 points, capturing the 41st place. The deputy minister introduced the changes carried out this year aimed at ensuring progress. “The return of the VAT debt remnants has been carried out. We also need to take into account the fact that not only the opportunity, but also the practical process is being assessed, in other words, how much time the return takes. We have quite a good figure in this regard, the average duration of returning the money is about one month. The presentations of environmental reports have completely become online”, he said.

Armenia is ranked 41st in the Ease of doing business ranking in the World Bank’s Doing Business 2019 report. Turkey is ranked 43rd, and Georgia is ranked 6th in the ranking.

Reported by Anna Grigoryan

Edited and translated by Aneta Harutyunyan