世界银行-亚美尼亚公共财政评论：提高财政政策效率（英）-2024.12-178页_5mb

Public Finance Review (PFR) II Summary for Armenia: Improving Tax and Education Systems

I. Introduction

• Armenia has made progress in tax collection, with a tax-to-GDP ratio averaging 23.5% (up from 21.2% previously) and plans to reach 25% by 2026.
• Key challenges: inefficiency in tax collection; regressive tax system affecting low-income groups; gaps in environmental taxation; and lack of resources for sustainable growth.

II. Improving Tax Efficiency and Equity

Key Findings

• VAT and Excise Taxes: VAT revenue is lower than peers due to exemptions (health, education, agriculture) and a high turnover threshold (AMD 115 million). Excise taxes on fuel and tobacco are inconsistent with sustainability goals.
• Effective Tax Rates (ETRs):
  • Corporate income tax (CIT) buoyancy is moderate, but gaps in enforcement reduce revenue.
  • Personal income tax (PIT) is regressive; low-income earners face higher effective tax burdens.
• Carbon Pricing: Currently low ($12/ton CO₂), hindering climate goals. Weak TCP limits the country’s ability to transition to a low-carbon economy.
• Carbon Revenue Recycling: Recycling to social transfers or public investment could enhance equity and growth.

Policy Recommendations

1. Broaden the Regular Regime:
   • Remove VAT exemptions for essential goods, lower the threshold (targeting informal economy growth).
   • Expand environmental taxes and phase out regressive subsidies.
2. Fairness and Equity:
   • Introduce progressive PIT focused on low-income earners (e.g., subsidies for health expenses).
   • Rationalize energy excises and implement an upstream carbon tax.
3. Sustainability:
   • Increase carbon price gradually, recycling revenue to support vulnerable groups.
   • Strengthen international tax rules to combat avoidance.

III. Improving Education Efficiency and Equity

Key Findings

• Enrollment and Access:
  • High net enrollment rates, but pre-primary (63%) and vocational education access remains low.
  • Urban-rural disparities: Rural areas have lower enrollment and quality.
• Learning Outcomes:
  • LAYS (Learning-Adjusted Years of Schooling): 8 years, below the regional average of 8.9 years.
  • TIMSS scores (2019) show average performance in math and science, with gaps by socioeconomic status.
• Efficiency:
  • DEA analysis reveals significant inefficiency (average score 0.53), especially in small rural schools.
  • Teacher shortages, low remuneration (25% of national wage), and administrative bottlenecks hinder performance.
  • Revenue allocation is less effective in vocational and higher education.

Policy Recommendations

1. Governance and Oversight:
   • Streamline roles for central, regional, and community governments in education funding.
   • Implement performance-based incentives and EMIS for accountability.
2. Equity and Access:
   • Expand pre-primary and vocational education through public-private partnerships.
   • Target financial aid to low-income students and rural schools.
3. Quality Enhancements:
   • Scale up digital tools and teacher professional development.
   • Align curricula with labor market needs, including STEM and vocational training.
4. Efficiency:
   • Consolidate small schools into networks to share resources and improve student-teacher ratios.
   • Use revenue gains from carbon pricing for public investment and teacher incentives.

IV. Conclusion

• Armenia must address revenue shortfalls in its tax system while improving the equity and sustainability of its education spending.
• Joint reforms on tax policy and education investments could
• Enhance human capital development, support inclusive growth, and align with climate goals.