The budgetary debates of standing committees of the National Assembly were summarized on November 8 at the sitting of the NA Standing Committee on Financial-Credit, Budgetary and Economic Affairs. The legislative body was presented the state investment and budgetary crediting programs of the Government. The agenda of the sitting envisaged also a debate on the formation of revenues.

Mr. Pavel Safaryan, the Deputy Minister of Finance and Economy, as well as those responsible of respective institutions gave data about the implementation of programs by budgetary means and credit sources.

From the 2007 State Budget the development of agriculture will be assigned 1billion 200 million drams more than last year. Mr. Zaven Galstyan noted, that from the anticipated 5 billion drams 610 million drams will be assigned to the works of soil improvement, 1.5 billion drams to the veterinary and anti epidemic measures and 1.1 billion drams - to the pedigree stock-breeding and seed-growing. The amount of allocation to the maintenance of forests, according to the draft, is 1.6 billion drams. In this sphere there will also be implemented credit projects, particularly the project on counteracting the avian flu. In the words of the reporter, this year for the first time there will be an attempt to replace the agricultural tax privileges with funding.

From the 2007 State Budget it is envisaged to allocate 21.5 billion drams to the transport and communication sphere. Mr. Andranik Manukyan, Minister of Transport and Communication informed, that 13.6 billion drams will be allocated for the repair of roads of state significance, 6 billion drams for the maintenance of republican and inter-country roads, and 470 million drams for the maintenance of community roads in winter.

Mr. Karen Chshmarityan, Minister of Trade and Economic Development informed, that in the coming year this sphere will be allocated 922 million drams. The “Program of State Support of Small and Medium Enterprise” will be financed with 400 million drams. 250 million drams will be allocated to the “State Program of Tourism Development.” The project of making Tsaghkadzor a center meeting the international standards will be allocated 180 million drams.

In the sphere of urban development the implementation of projects launched last year will continue in 2007. For this purpose the budget envisages 17 billion drams. Mr. Aram Harutyunyan, Minister of Urban Development presented the major directions of expenses. 9 billion drams will be allocated for the repair, and 813 million drams – for the construction of educational institutions. 1 billion drams will be allocated for the repair of cultural buildings.

According to Mr. Andranik Andreasyan, Chairman of the Water Economy State Committee this sphere will be allocated 7.7 billion drams. This year for the first time the water system of Armenia will not be funded by the state and moreover, it will have its contribution in the revenues of the budget. The system will be funded by 5.4 billion drams. The World Bank will continue to implement projects in the sphere of irrigation.

Mr. Ara Simonyan, Deputy Minister of Energy informed, that from the state budget 738 million drams will be allocated for the sphere, especially for the improvement of energy security, technical rearmament and more efficient use of capacities. The prevailing part of it will be allocated to the construction of a storehouse for the maintenance of nuclear fuel with a dry method at “Armenian NPP” CJSC. 30 million drams will be allocated for rendering the wastes harmless.

Mr. Robert Nazaryan, Chairman of the Committee Regulating Public Services, touched upon the possible scenarios of changes in tariffs in 2007. The Armentel Company has already submitted a claim to the Committee for increasing the tariffs. The Committee has once rejected the claim, and after receiving it for the second time, will discuss at the sitting of November 24. The Committee has also received a claim of increasing the tariffs form Armrusgasard. The Company suggests increasing the tariff for manufacturers and power engineers (consumers of 10 thousand and more cubic meters of gas) from 146.5 dollars to 178 dollars for one cubic meter. There is no envisaged change in the tariffs for small consumers. The Committee will study the proposal till December 1 and make a decision. The water sphere does not envisage changes in tariffs.

Touching upon the second agenda issue – the formation of revenues – the Deputy Minister of Finance and Economy declared, that the Government is not going to increase the taxes. In 2007 the executive body anticipates 489 billion drams of revenues in place of 436.5 billion drams of last year. According to the draft the respective bodies will provide 80 billion drams of extra revenues in taxes and duties as a result of economic growth and improvement of tax administration. The Deputy Minister considers the growth of the part of taxes and duties in total revenues to be a positive indicator, which is 93 percent. These are permanent revenues, says Mr. Pavel Safaryan.

Mr. Armen Avetisyan, Chairman of the State Customs Committee informed that the customs body provides about the 40% of budget revenues. This year the Customs Committee has collected 162 billion drams. Because of dollar-dram fluctuations and increase of value of national currency, the inflows of the Committee may decrease in 2007.

According to the data provided by Mr. Felix Tsolakyan, Head of State Tax Service, the taxes and duties will form 458.9 billion drams in the revenues of the budget. As a result of improving the tax administration, it is envisaged to receive 54 billion drams of extra revenues. The head of the Tax Service considers the collection of 80 billion extra revenues in comparison with the last year to be risky.

After this phase of budgetary debates, upon the proposal of the NA President the draft law on 2007 State Budget of the Republic of Armenia will be placed on the agenda of four-day sittings will be heard at the plenary session. Until then, on November 10 the written proposals of budgetary debates in the committees will be submitted to the Government.