YEREVAN, February 23, /ARKA/. Armenia’s taxation policy should be revised to make it more effective and flexible, Tatul Manaserian, a former advisor to parliament speaker on economic issues, said today during a round table discussion on inflation trends.

Presenting his new Alternative think-tank he said the tax burden must be distributed proportionally among economic entities warning that otherwise the shadow economy would result in increased tax burden on a smaller number of companies that in turn leads to mounting prices.

He said the Alternative think-tank has developed a vast package of proposals on how to improve taxation policy and will send it to the government. Reminding that Armenia’s imports exceed exports by a factor of four and that Armenia has to accept rules of games dictated from outside the country, he said the government should take swift measures to encourage domestic production. Particularly, he said the government should offer incentives to farmers to cultivate idle lands, including not only subsidies but also free irrigation water.

‘We can not compete with developed nations that spend huge amounts on subsidizing their agricultures that results in low prices,’ he said.

In comments on inflation trends he said to curb it the authorities should hear what experts say and follow at least some of their recommendations.

According to the latest forecast of Armenia’s Central Bank, inflation will be high throughout the first six months of the year and will drop sharply in the second half to its projected target of 4%-5.5%. -0-