Armenia’s Tax Reform Council Opens 2026 with Strategic Priorities

On January 17, 2026, in Yerevan, the Tax Reform Council for Risk Management, established under Armenia’s State Revenue Committee (SRC), convened for its first meeting of the year. The gathering was chaired by Eduard Hakobyan, who leads the SRC and serves as the council’s president. The purpose was clear from the outset: to set the tone for 2026 by defining guiding principles, strategic directions, and concrete projects that are essential for elevating tax compliance and refining how risks are identified, measured, and mitigated across the country’s fiscal landscape. Hakobyan underscored that the meeting represented a milestone in translating high-level policy aims into actionable steps, with an eye toward measurable improvements in enforcement, governance, and revenue performance.The opening remarks framed the session as a platform for aligning agencies, tax administrations, and stakeholders around a shared agenda. Participants were reminded that the council’s work is not a one-off exercise but a recurring process designed to adapt to evolving economic conditions, enforcement challenges, and data-driven insights. In that context, the SRC signaled its commitment to deploying structured risk indicators, sector-specific analyses, and targeted interventions that can be scaled up or down depending on performance indicators and emerging trends. The council’s leadership highlighted that the work program for 2026 would be anchored in empirical evidence, robust data collection, and ongoing evaluation of policy instruments intended to deter non-compliance without imposing undue burdens on legitimate businesses.

A central theme of the meeting was risk assessment. The participants stressed that risk-based approaches should be anchored in sectoral realities rather than generic imperatives. In practice, this means refining risk models to capture industry-specific dynamics, such as cash flow patterns, informal employment practices, and the complexity of supply chains. The council discussed the need to incorporate more granular data—ranging from tax returns and payment histories to entry and exit patterns of firms—to sharpen the predictive quality of risk scoring. The expectation is that enhanced risk signals will guide supervisory activities, audit planning, and educational outreach more effectively. While the overarching objective remains to broaden the tax base and improve collection efficiency, there was also insistence on proportionate enforcement that preserves the competitiveness of compliant operators.

The meeting placed particular emphasis on sectoral analyses. In this regard, construction, dairy production, and retail trade were identified as focal points for 2026. In construction, issues such as subcontractor transparency, invoicing practices, and the use of tax instruments designed to curb informal labor were flagged as priority risk areas. The dairy sector was highlighted for its value chain complexities, including herd management, output quality controls, and market transparency. Retail trade, with its extensive network of small and medium-sized enterprises, posed distinct challenges related to point-of-sale reporting, inventory accuracy, and the timely capture of revenue streams. By foregrounding these sectors, the SRC signaled its intention to deploy targeted compliance and monitoring measures, recognizing that sector-specific insights can reveal systemic patterns of non-compliance that generic analyses might miss.

A substantial portion of the discussion revolved around the outcomes of compliance programs that target large taxpayers and the furniture manufacturing industry. The participants reviewed findings from recent enforcement initiatives, noting both progress and persistent gaps. Among the observed issues were non-registration of workers and non-compliance with cash-register (HDM) usage rules, which collectively undermine the integrity of revenue reporting and tax collection. Penalties were discussed as a necessary tool for deterrence, but the council emphasized the importance of coupling penalties with preventive actions, such as improved capacity-building for businesses, clearer regulatory guidance, and enhanced monitoring mechanisms. The dialogue also underscored how compliance programs can act as diagnostic instruments—identifying weaknesses in the tax system itself, such as gaps in data interoperability, gaps in audit trails, and inconsistencies in reporting standards across different industries.

Beyond enforcement outcomes, the participants stressed the continuing importance of behavioral analysis. Understanding taxpayer behavior is viewed as critical to designing more effective interventions and ensuring that reforms promote voluntary compliance. The council agreed that ongoing data collection, trend analysis, and contextual research are essential for identifying drivers of non-compliance and for evaluating the effectiveness of policy tools. This emphasis on behavioral insights reflects a broader shift toward evidence-based policymaking, in which reforms emerge not only from legal and administrative changes but also from an in-depth understanding of how taxpayers respond to incentives, penalties, and the administrative environment.

The January 17 session also addressed practicalities of implementation. Delegates discussed the sequencing of projects for 2026, prioritizing those with the potential for rapid impacts on compliance rates and risk detection while maintaining a steady course for long-term reforms. The council highlighted the role of digitalization and data-sharing among relevant authorities as a core enabler of effective risk management. In addition, attention was given to communication and outreach strategies aimed at clarifying expectations for businesses and ensuring that changes in enforcement practices are understood and accepted by the private sector. The overarching message was that the policy framework should be dynamic—capable of adjusting to new information, shifting economic conditions, and feedback from taxpayers and professionals involved in the sector.

Among other outcomes, the meeting reaffirmed a governance approach that promotes transparency, accountability, and continuous improvement. Participants noted the importance of documenting decision-making processes, publishing performance indicators, and maintaining an operational culture that values both rigorous oversight and fair treatment of taxpayers. The seminar-style format of the session and the emphasis on cross-agency coordination suggested a move toward more integrated tax administration, in which risk assessment, compliance, enforcement, and policy design are not siloed functions but interconnected elements of a comprehensive reform strategy. Looking ahead, officials signaled that the 2026 work program would be refined through subsequent meetings, with a cadence that allows for timely adjustments in light of evolving evidence and on-the-ground experience.

Overall, the 2026 first meeting of Armenia’s Tax Reform Council for Risk Management established a clear trajectory for the year. It signaled a deliberate shift toward data-driven, sector-aware policy design that seeks to elevate tax discipline while addressing the practical realities of businesses and workers. The session illustrated the government’s willingness to invest in analytical capabilities, to strengthen monitoring and enforcement where necessary, and to foster a climate in which compliant firms can operate more predictably. As the year unfolds, observers will look to the council’s ongoing work to gauge progress against its stated guidelines and to assess the broader impact on Armenia’s tax morale and revenue stability.