Tax filing strategy failing in Armenia, says Eurasianet

Armenia is trying to emulate the United States’ revenue collection model by requiring citizens to file an annual income declaration. So far, it is not going so well, Eurasianet writes.

Many workers in the United States have a portion of their salaries withheld to pay a variety of taxes, and virtually all adults are required to file a Form 1040 tax return at the end of the year to determine the actual amount of taxes they owe. Lots of filers end up receiving refunds for having more money withheld than they must give to the government.

Armenia started phasing in a similar system in 2023, and, under the original plan, it was supposed to be fully operational this year. But officials may have to rethink their implementation strategy.

According to official data, only 54,000 out of 900,000 projected filers had submitted an annual tax declaration by the May 1 deadline. The filing deadline had been extended to Nov. 1.

The low filing number is not entirely a matter of public resistance. The rollout of the filing system has been plagued by software glitches. Officials also require all declarations to be filed electronically via a government portal and many elderly Armenians lack computer skills and/or access to computers. In addition, privacy regulations prevent citizens from using accountants or tax preparation services to file declarations for them.