I n recent years, the tax revenues paid to the RA state budget by 1000 major taxpayers have recorded a dynamic increase. In particular, if we look at the dynamics of the last 6 years, in the first quarter of 2023 the volume of the tax revenues increased 2.5 times compared to the same period in 2015. It should be noted that the share 1000 large taxpayers in the volume of total tax revenues increased to 82.6%. In the first quarter of 2023, the volume of tax revenues paid to the RA state budget by 1000 major taxpayers amounted to more than 381 bil. 104 mil. drams, which increased by more than 54 bil. drams or by 16.5% compared to the same period last year. Gazprom Armenia, Zangezur Copper Combine (ZCMC) and Grand Tobacco are the top 3 taxpaying companies to transfer the most money to the RA state budget in the first quarter of this year.

For years, the mining industry played a significant role in the structure of the Armenian economy, which is also reflected in the list of 1000 major taxpayers. However, there are certain structural changes in the list of major taxpayers, which are partially due to the developments taking place in the world. In particular, the mining companies began to give way to companies operating in trade field.

Top 10 major taxpayers: declining role of mining companies

T here are positional changes in the list of major taxpayers of the current year: mining companies have somewhat lost their positions to organizations operating in trade.

There is some concentration in the top 1000 major taxpayers, which proves that almost 25% of the tax revenues paid by taxpayers are accounted for by the 10 major taxpayers, and more than half of the taxes paid by the top 1000 taxpayers come from the taxes paid by the top 100. This change proves the high degree of concentration among major taxpayers.

Since 2015, the tax volume paid by 1000 large taxpayers has recorded a dynamic increase. Except for 2018, in all other years, there was a dynamic growth in the volume of taxes paid by 100 large taxpayers. The most dramatic increase was recorded by 100 large taxpayers, especially compared to the previous year, the increase was 31.5% in 2022.

During the reporting period, ten major taxpayers paid 90.1 bil. AMD to the state budget, which decreased by 6.3% compared to the same period last year. The volume of taxes paid by the ten large taxpayers increased more than twice in January-March 2023 compared to the same period in 2015.
For years, the list of major taxpayers included mostly industrial companies, however, this year one company from the banking sector, Acba bank, as well as the Pretty Way company operating in the field of trade were also included.

It is noteworthy, that the volume of taxes paid by all the companies in the top ten major taxpayers, except for ZCMC, has increased compared to the same period of last year. In this context, it should be noted that currently, Armenian government holds a 21.875% stake in ZCMC. On September 30, 2021, the RA government received a 15% stake from the combine as a donation, and later another 6.8% stake on March 24, 2022.

Addressing the analysis of tax revenues collection by organizations on the list of major taxpayers, we should note that Gazprom Armenia currently tops the list of major taxpayers: in the first quarter of 2023, the amount of taxes paid to the state budget increased by more than 4% compared to last year. Based on the 2022 data, the company was in the second place. Gazprom Armenia, as a rule, has always been included in the top three taxpayers.

In the first quarter of the current year, ZCMC is on the second place instead of the first place compared to the same period of last year. It should be noted that the volume of tax revenues paid to the RA government by the combine has decreased compared to last year, which is resulted by the recovery of lost tax revenues due to violations by the previous owner, in the first quarter of 2022. Furthermore, the price of copper concentrate decreased in the international market in the first quarter of 2023, as well as the Armenian dram appreciated, which had its direct impact on the taxes paid by the company.



It can be seen that the volume of the taxes paid by ZCMC reached the maximum in 2022, especially in the second quarter. Compared to the last year, the volume of taxes paid by the company increased by 2.3 times, which is mainly due to the increase in copper prices in the international market, since the latter is an exporting company.

Top 100 major taxpayers: improving the position of trade field companies

A t present, the trade sector is one of the most active branches of Armenia’s economy, which is one of the fundamental factors contributing to economic growth. It becomes clear from the lates data, that in the first quarter of 2023, the economic activity index in Armenia was most affected by the growth recorded in the field of services (22.9%) and trade (21%). The activity in the mentioned fields started especially since March of the previous year, due to the increase of significant flows in the RA caused by the Russian-Ukrainian conflict.

Examining the distribution of the 100 major taxpayers by fields in the first quarters of the last 2 years, we note that in the current year, the list includes mostly the companies engaged in commercial activities, making up 33.2% of the total compared to the 24.1% in the same period last year. Despite all this, the share of the companies operating in the industrial field has decreased: the share of industry branch in the top 100 major taxpayers was 38.1% in 2023, compared to 49.3% of last year.
In the first quarter of the current year, Mobile Centre Art, which is the largest network selling mobile phones in Armenia, is on the 7th position. Pretty Way company appeared in the top 10 of the largest taxpayers for the first time, occupying the 4th position compared to the 118th position in the same period last year. It should be noted that the company is engaged in the sale of electrical equipment and household appliances.
In January-March 2023, there is also a significant decrease in the “Other” section, which is mainly due to the decision of the Government, according to which, starting from the second quarter of 2022, the RA state and municipal administrative institutions were removed from the list of taxpayers. “Taxes paid by state and municipal administrative institutions do not directly characterize the results of their activities, but are the result of the redistribution of funds provided by the state budget,” stated SRC, justifying the need of the state institutions not to be included in the list.

1000 large taxpayers: banking system

C onsiderable activity in the banking sector continues since March of last year due to the Russian-Ukrainian conflict. This is also noticed when studying the list of 1000 large taxpayers: 17 Armenian banks were included in the list of large taxpayers in the first quarter of 2023, together paying more than 20 bil. AMD tax revenues, which increased by about 58% compared to the same period last year.

It is noteworthy, that Acba Bank appeared in the top ten of major taxpayers, ranking the 6th, compared to the 24th place in the same period last year. In the first quarter of 2023, the RA commercial banks registered a profit of 70 bil. drams, which is almost 2 times higher than the result of the same period last year. For the reporting period, the level of profit of Acba Bank was 4.9 bil. drams, exceeding the level of the same period of last year by 62.8%.
Among the 18 banks operating in Armenia, Ardshinbank recorded the highest profit level: the level of profit received by the bank increased 3.6 times making 16.7 bil. drams compared to the last year.

During the given period, all banks worked with profit, however in case of Fast and Armswissbank, the level of net profit decreased compared to last year. Only Artsakh bank out of the 18 banks was not included in the list of major taxpayers in the current year. It should be noted that since December 14 of last year, Fast has become a bank from a credit organization.

Ameriabank is the second largest taxpayer bank with a tax volume of 2 bil. drams (the bank paid 1.6 bil. drams to the state budget in the same period of 2022). The taxes paid by the bank increased by 27.7% compared to last year and it ranks the 22th in the list of taxpayers. It is followed by Armeconombank with 1.78 bil. drams (27th place, 126.8% growth), Ardshinbank with a tax volume of 1.52 bil. drams (37th place, 55% growth).

As a whole, the volume of taxes collected by the banks to the state budget increased significantly for the reported period of the current year. The significant increase in deposit investments by non-resident individuals in Armenian banks from February 30 to June 30, 2022 also proves about the activity in the field of banking. In particular, they increased by 70.4% compared to the same period of last year.

Recently, the Central Bank has also stated that the banking system entered 2022 with a high level of capital adequacy, which has further strengthened throughout the year.

It should also be noted that last year the list of 1000 large taxpayers was completed by organizations that paid at least 50 mil. AMD in tax income, while the list of the first quarter of the current year was completed with more than 75 mil AMD in taxes paid. It can be assumed that the large companies have increased the amount of taxes paid even more, thus smaller companies have left the list. Along with all this, SRC representatives noted that 350 new company names appeared in the list in the first quarter of the current year.

It should be noted that already in the second half of the last year, Meta Platform company was included in the list of 1000 major taxpayers of SRC, occupying the 287th place in January-March 2023 compared to the 803th place in January-December 2022.

The company’s appearance in the list is due to the fact that the RA government made amendments to the Tax Code in August 2021, and it was decided to tax the advertisements posted on Facebook, Google, Booking, Netflix and other electronic platforms.

All in all, studying the list of the 1000 large taxpayers, we note that mining companies have somewhat lost ground to trading companies. This proves that Armenia cannot remain aloof from geopolitical events.