The draft of the 2016 State Budget is first and foremost based on the provisions of realism and stability. This is what RA Prime Minister Hovik Abrahamyan announced during a discussion on the 2016 State Budget at the National Assembly today, reports Panorama.am.

According to the Prime Minister, the 2016 State Budget is once again clearly socially oriented, and evidence of that is the fact that expenses for the social, educational, cultural and healthcare sectors make up half of the budgetary expenses.

 “The expenses for ensuring defense and national security and maintaining social order are foreseen with the logic of strengthening and maintaining our viability in these sectors,” the Prime Minister said, adding that the Government of the Republic of Armenia will continue to provide financial assistance to the Nagorno-Karabakh Republic.

Abrahamyan mentioned that the developments in the tax and budgetary sector in the region are evidence of structural changes taking place in the world.

“Promising improvements with all aspects of economic growth and social welfare in the context of tense geopolitical developments is a populist, but not a sincere approach,” the Prime Minister mentioned.

Abrahamyan also informed that several economists and international organizations rate the developments this year as heavier for our region than the global financial and economic crisis between the years of 2008 and 2009.

“The shifts in currency in the Russian Federation are due to the sharp shifts in prices of power generators, and this led to the sharp fall of money transfers in countries of the region. Such a fall essentially slowed down economic growth and underscored the imperative to raise the level of efficiency of social expenses,” Abrahamyan emphasized.

According to him, under these conditions, the nearly 3.6% economic growth that has been recorded over the past 9 months in the Republic of Armenia goes to show that the only solution in the case of worsening of the global situation is to promote investments and create jobs.

“Armenia needs to promote Armenian products, encourage exports and create preconditions for stable growth. Amid such reduction of the pace of economic growth, alongside structural and management reforms indicated in the draft of the State Budget of the Government of the Republic of Armenia, stability of the tax and budgetary sector is very important from the perspective of creating equal conditions for all economic entities for the business climate,” Abrahamyan added.

According to him, in this sense, the discussion on and adoption of the new Tax Code of the Republic of Armenia is becoming absolutely important. As the Prime Minister mentioned, during the development of the code, he assigned the Ministry of Finance to envisage the promotion of long-term growth, place the main emphasis on levying of consumption to raise the level of competitiveness of the country and, as a main provision, raise the level of efficiency of tax collection and the facilitation of conditions for taxpayers.

“These reforms will be implemented in the course of three to five years. We need to envisage gradual complication of the tax administration,” the Prime Minister said, adding that there will be active discussions on the budget in the National Assembly.

The Prime Minister also added that the government views the problems from the perspective of economic development, not the interests of today. He emphasized that he had done his best to place long-term benefits above the temptation to earn direct income.