| Policy Area
| Objectives and Targets
| Strategies and Measures
| Timing |
| Fiscal Policy and
administration
| Mobilize additional
revenue: broaden tax
base and increase tax
rates
| Implement new tax measures: |
| Reduce VAT exemptions for social, cultural
and humanitarian organizations.
| 1995 |
| Impose VAT on non-CIS goods that transit
through a CIS country.
| 1996 |
| Remove VAT exemption for sewerage and
water.
| 1996 |
| Establish two band customs tariff at 0 and
10 percent.
| 1995 |
| Introduce customs duties on coffee and
cocoa.
| 1996 |
| Impose excises on non-CIS goods that
transit through a CIS country.
| 1995 |
| Implement comprehensive property tax for
households.
| 1996 |
| Collect VAT on imports at customs.
| 1996 |
| Increase excise on gasoline to 35 percent.
| 1997 |
| Increase excise on tobacco products to
100 percent.
| 1996 |
| Increase excise on cognac, vodka and other
high proof liquors to 125 percent.
| 1996 |
| Simplify withholding for the personal
income tax on dividends and interest.
| 1997 |
| Abolish the excess wage tax in tandem with
increases in enterprise profit and
personal income tax rates to ensure at a
minimum revenue neutrality.
| 1996 |
| Withdraw present discretionary privileges
for accelerated depreciation, tax holiday
provisions for new firms, and the 50
percent tax exemption for joint ventures
with foreign participation.
| 1997 |
| Improve tax
administration
| Establish an Enforcement Unit within the
State Tax Inspectorate (STI) to enhance
compliance with current tax obligations
and to deal with the stock of tax arrears.
| 1996 |
| Formally designate a Steering Committee to
oversee reorganization of STI along
functional lines and create a project
office to implement the modernization
program.
| 1996 |
| Complete assignment of Taxpayer
Identification Numbers for all legal
persons, including nonprofit
organizations.
| 1996 |
| Establish a Large Taxpayer Unit within the
STI.
| 1996 |
| Amend the tax laws to strengthen
collection and assessment powers of tax
officers.
| 1996 |
| Replace the complicated system of
depreciation schedule under the Enterprise
Profits Tax by system of depreciation on a
declining basis.
| 1997 |
| Establish sales threshold under which
enterprises could choose to pay the
presumptive tax instead of paying the VAT.
| 1997 |
| Implement a modern computer system in the
STI.
| 1996 |
| Improve customs administration by
establishing customs clearance facilities
at the border.
| 1996-98 |
| Expenditure and
budget control
| Avoid arrears and
improve expenditure
control and management.
| Reduce the stock of expenditure arrears to
zero.
| 1995 |
| Gradually introduce the Treasury system in
the Ministry of Finance (MoF)
(i) adopt decision to separate
budgetary and treasury functions within
the MoF;
(ii) set up a Treasury department in the
MoF;
(iii) create a ledger system of
accounts;
(iv) consolidate government bank
accounts into a single Treasury
Account; and
(v) replace the system of cash
rationing with a more flexible system of
financial planning
|
1995
1996
1996
1996
1996
|
| Establish a Debt Management Unit within
the MoF
| 1996 |
| Improve targeting of
social safety benefits
| Enact Pension Law
| 1995 |
| Reduce the eligible age for child
allowances to six years and increase
amount of allowance per child.
| 1996 |
| Formulate regulatory framework for private
pension scheme.
| 1996 |
| Administrative
reform
| Restructure civil
service
| Reduce the size of budgetary sector
employment to:
360,000
320,000
290,000
| By
1996
1997
1998 |
| Public enterprise
reform
| Impose hard-budget
constraints
| Place the Nairit Chemical Company in the
enterprise restructuring plan.
| 1996 |
| Collect monthly data on energy arrears,
tax arrears, and arrears to the banking
system.
| 1996 |
| Privatization
| Privatize all state
enterprises except
those with a clear
public sector role.
| Complete privatization of 2,000 small-scale enterprises and 400 medium-to-large
scale enterprises.
| 1996 |
| Complete privatization of all small-scale
enterprises and an additional
1200 medium-to-large scale enterprises.
| 1996 |
| Financial sector
reform
| Commercial bank
restructuring
| Halt new lending to enterprises,
individuals, and the interbank market by
Savings Bank.
| 1995 |
| Formulate program to reorganize the
Savings Bank.
| 1996 |
| Complete a detailed audit of Ardshinbank,
Armagrobank, Armeconombank, and
Armimpexbank.
| 1996 |
| Enact loan loss provisioning rules.
| 1996 |
| Change tax treatment of provisions for bad
loans.
| 1996 |
| Issue CBA resolutions to all banks
recommending to stop divided payments from
unrealized gains, or by banks that do not
meet prescribed prudential regulations.
| 1995 |
| Technical improvements
| Introduce an electronic payments system
and establish a system for clearing
interbank settlements.
| 1996-98 |
| Introduce book-entry system to facilitate
secondary market trading in Treasury
bills.
| 1996 |
| Start training on-site examiners.
| 1996 |
| Monetary
policy
| Strengthen monetary
control and management
| Begin regular announcement of Treasury
bill auctions.
| 1995
|
| Limit banking system net credit to general
government to dram 11,185 million.
| 1995 |
| Limit CBA net domestic assets to dram
17,969 million.
| 1995 |
| Achieve a minimum level of net
international reserves for the CBA of
US$19.3 million.
| 1995 |
| Replace the current system of fixed term
loans to Government by the CBA with a
credit line arrangement.
| 1996 |
| CBA to withdraw from regular participation
in foreign exchange market.
| 1996-98 |
| Provide CBA credit to banks only on a
collateralized basis.
| 1996 |
| Complete the audit of the 1995 CBA
accounts by an internationally recognized
auditing firm.
| 1996 |
| Launch Lombard lending facility
| 1996 |
| Enhance the reserve management function.
| 1996-98 |
| Maximize nonbank financing of the budget
deficit to reduce CBA financing.
| 1996-98 |
| Eliminate credit auctions by the CBA.
| 1998 |
| Exchange rate
| Eliminate multiple
currency practice
| Set the official daily exchange rate based
on market rate of previous day.
| 1995 |
| Trade reform
| Remove remaining trade
restrictions.
| Use minimum "reference" export prices
solely for purpose of determining profits.
| 1995 |
| Eliminate official clearing trade with
Russia.
| 1995 |
| Take initiative to regularize outstanding
commercial gas arrears to Turkmenistan by
proposing that write-offs or grants be
contingent on remaining current or future
deliveries.
| 1996 |
| Settle undisputed outstanding debit
balances on the correspondent accounts
between the CBA and other central banks of
the FSU.
| 1996 |
| Eliminate direct government involvement in
clearing trade with Turkmenistan.
| 1995 |
| Introduce duty drawback scheme.
| 1997 |
| Foreign investment
| Eliminate preferential
treatment for foreign
investors
| Review and revise existing foreign
investment law.
| 1996 |
| Energy sector
| Improve efficiency and
self-sufficiency
| Implement policy of terminating
electricity supply to nonpaying, non-essential users.
| 1996 |
| Implement new tariff structure for
electricity so that it fully covers
operational and maintenance costs.
| 1996 |
| Complete restructuring and corporatizing
Armenergo and Armgas.
| 1996 |
| Restructure the electricity and gas
sectors to achieve greater corporate
autonomy and increase financial
accountability of these enterprises.
| 1997 |
| Implement tariff structure for all
utilities so that it covers full cost of
production.
| 1996 |
| Improve maintenance of existing plants in
the energy sector and also upgrade them.
| 1996-98 |
| Legislative reforms
| Enact the Real Property Law.
| 1995 |
| Provide IMF and World Bank staff with
revised Law on Collateral and Law on
Bankruptcy.
| 1996 |
| Submit to Parliament for approval draft
laws on Collateral and on Bankruptcy.
| 1996 |
| Enact legislation to ensure an adequate
legal basis for the collection of
statistics by the State Department of
Statistics.
| 1996 |
| Provide IMF and World Bank staff with
draft Law on the Central Bank.
| 1996 |
| Enact revised Law on Central Bank.
| 1996 |
| Provide IMF and World Bank staff with
draft revisions of the Law on Banks and
Banking, and the draft Law on Bank
Insolvency.
| 1996 |
| Enact revised law on Banks and Banking and
Law on Bank Insolvency.
| 1996 |
| Housing sector
| Privatization
| Complete housing privatization in line
with effective legislation and ensure that
rents on nonprivatized housing are
increased to cost-recovery levels.
| 1996 |
| Transport sector
| Improve efficiency
| Implement phased adjustment in user fees
for roads and other transportation media.
| 1996 |
| Establish commercially oriented railway
management
| 1998 |
| Expand facilities for air transportation.
| 1996-98 |
| Health sector
| Improve efficiency
| Prepare a financing strategy which will
include a Basic Benefits Package to be
funded in priority by the State Budget.
| 1996 |
| Reduce and restructure the facilities
providing curative care by closing some
underutilized facilities.
| 1996 |
| Improve financing of
health services
| Begin implementation of a fee-for-service
system.
| 1996 |
| Restructure the health sector by
regrouping, closing and privatizing
facilities in order to reallocate
resources to basic primary health care
programs.
| 1997 |
| Education sector
| Improve efficiency
| Reduce subsidies for post-secondary
education and allow increased
decentralization in this sector.
| 1998 |
| Environment
| Protect environment
| Enact a National Law on the Environment.
| 1997 |
