The Armenian government has announced the introduction of a universal income declaration system, presenting it as a mechanism to provide financial support to working citizens. During the government session on January 30, Prime Minister Nikol Pashinyan stated that this system would allow for the return of 70 billion drams, which, according to him, would help cover education and healthcare expenses. He recalled that the state had previously refunded 68 billion drams through a mortgage tax deduction program, and this new system is a continuation of that approach.
However, the real objectives and consequences of this initiative raise concerns. While the government presents it as a tool for tax transparency, it effectively expands state control over citizens’ finances. This is not merely about tax redistribution but rather a strengthened mechanism for financial oversight, giving the state greater insight into individual income and spending.
Government’s Approach: Pushing Towards Mandatory Declarations
Minister of Economy Gevorg Papoyan argues that those who oppose the income declaration system essentially reject the idea that working families should receive an additional 200,000 drams annually through tax refunds. He describes the process as requiring just 20–30 minutes of effort in exchange for an annual refund of around 100,000 drams.
However, this perspective only scratches the surface. While the government frames the initiative as a citizen-friendly policy, its true intention seems to be expanding state supervision. The current tax system already allows authorities significant access to financial flows, and this new policy further consolidates that power, granting the government a complete picture of an individual’s income sources, expenditures, and financial behavior. This raises serious concerns about personal data protection.
Financial Privacy Violations and Increased Oversight
Chairman of the State Revenue Committee (SRC) Eduard Hakobyan stated that the system would make citizens more transparent in the financial market, easing access to bank loans and facilitating business operations. In reality, however, this move significantly undermines financial privacy.
Previous amendments to tax laws have already allowed tax authorities to request banking information without a court order, effectively nullifying the principle of banking confidentiality. This new system takes it a step further, enabling the government to use tax data not only for economic purposes but potentially as a political control tool.
Is This a Voluntary System or Coercion?
According to official statements, the system is voluntary. However, citizens are effectively pressured to disclose their financial information in exchange for financial incentives. This raises an important question: if the system is truly voluntary, why are people being forced to choose between financial confidentiality and receiving state benefits?
In practice, this means that citizens who wish to receive tax refunds will be required to disclose their full income. These conditions could disproportionately affect small businesses and self-employed individuals, who would find themselves under constant scrutiny by tax authorities.
Increasing Administrative Pressure and Tax Burden
The introduction of a universal income declaration system can logically only lead to one outcome—an increased tax burden. While the government promises a 70-billion-dram tax return, expanded financial oversight could ultimately result in stricter tax enforcement and increased obligations to fill state coffers.
This will not only affect businesses but also ordinary citizens, who could face administrative pressure if they make errors in their declarations or fail to comply with government requirements.
Lack of Democratic Oversight Over the System
The government presents this initiative as a reform aimed at tax fairness, yet it has not undergone broad public discussion. As a policy with significant economic and political consequences, it should not have been implemented without extensive public involvement. Instead, this system has been imposed top-down, highlighting the administration’s disregard for democratic decision-making processes.
In other countries, similar tax policy changes have been introduced through referendums or prolonged public debates, making Armenia’s rapid implementation a cause for concern.
Conclusion
The universal income declaration system is being framed as financial relief for working citizens, but it has deeper implications. It expands state oversight, infringes on financial privacy, and could ultimately lead to higher tax burdens.
This new system sets a dangerous precedent, where the government gains an unprecedented level of control without providing citizens with democratic means to contest it.
The coming months will reveal how this policy unfolds, but one thing is already clear: it will directly impact the economic and personal freedoms of Armenian citizens.
