World Bank Group2015-01-052015-01-052014-05https://hdl.handle.net/10986/21063Armenia's small revenue and spending envelopes limit the government's ability to influence the economy, even while its influence through laws, rules, and regulations is significant. The government has an important role to play to reduce poverty and boost shared prosperity, and needs fiscal space. This public expenditure review (PER) analyzes and provides recommendations for the different dimensions of expanding the fiscal envelope. There are three ways of creating fiscal space: the first is higher tax revenue mobilization (through better administration and enforcement of existing taxes, higher tax rates, or new taxes on previously untaxed goods and services or incomes), second, lower spending on less productive programs, and third, an increase in the effectiveness of spending, that is, a higher output of the things the government wants (efficient administration, human capital, services for the population) for a given level of spending. The report highlights Armeniaapos;s limited fiscal envelope, and points out that key areas, such as education, health, and road transport, had been consistently underfunded. It suggests that revenue needs to be significantly improved, and the government will have to revisit its expenditure priorities to create the spending headroom needed to at least maintain the spending level in these areas. The structure of the report is presented as follows: section one gives executive summary. Section two focuses on quantifying fiscal activities. Section three analyzes a number of tax exemptions and loopholes. Section four analyzes ways to improve the impact out of every Armenian dram raised and spent. Section five evaluates in detail the social protection system's performance. Section six accompanies the reforms of Armenia's public service remuneration system.en-USCC BY 3.0 IGOACCOUNTINGANALYTICAL CAPACITYBAILIFFBANKING SECTORBENEFICIARIESBONDBOND HOLDERSBOND MARKETBROKERSBUDGET BALANCEBUDGET CONSTRAINTSBUDGET CYCLEBUDGET DEFICITBUDGET EXPENDITUREBUDGET PROCESSBUDGET SURPLUSBUDGETINGCAPITAL EXPENDITURECAPITAL EXPENDITURESCAPITAL MARKETCASH TRANSFERSCENTRAL BANKCENTRAL BUDGETCIVIL SERVICECIVIL SERVICE PAYCOLLATERALCOMMERCIAL BANKSCOMPOSITION OF EXPENDITURESCONCENTRATION COEFFICIENTCONCENTRATION COEFFICIENTSCONTINGENT LIABILITIESCORPORATE INCOME TAXCORPORATE TAX RATECURRENCYDEFICITSDEPOSITDEPOSITORSDIFFERENTIALSDISABILITY PENSIONSDISTRIBUTION OF INCOMEDOUBLE TAXATIONECONOMIC CLASSIFICATIONEDUCATION SPENDINGEMERGING ECONOMIESEQUIPMENTEXPENDITURE POLICIESEXPENDITURE PRIORITIESEXPENDITURE PROGRAMSEXPENDITURE REPORTINGEXPENDITURE REPORTSEXPORTERSFINANCIAL CRISISFINANCIAL INSTITUTIONSFINANCIAL OVERSIGHTFINANCIAL STATEMENTSFINANCIAL SYSTEMFISCAL ACTIVITIESFISCAL ADJUSTMENTFISCAL BALANCEFISCAL CONSOLIDATIONFISCAL ENVELOPEFISCAL IMPACTFISCAL POLICYFISCAL PROJECTIONSFISCAL SPACEFISCAL SUSTAINABILITYFIXED ASSETSFOREIGN EXCHANGEFOREIGN EXCHANGE TRANSACTIONSGOVERNMENT BONDGOVERNMENT BONDSGOVERNMENT BUDGETARY FRAMEWORKGOVERNMENT EXPENDITUREGOVERNMENT GUARANTEESGOVERNMENT POLICYGOVERNMENT REVENUEGOVERNMENT REVENUESGOVERNMENT SECURITIESGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTHEALTH CAREHEALTH OUTCOMESHOUSEHOLD INCOMEHUMAN CAPITALHUMAN RESOURCEINCOME REDISTRIBUTIONINCOME TAXINCOME TAXESINFLATIONINFRASTRUCTURE INVESTMENTSINSURANCEINSURANCE COMPANIESINTEREST EXPENSEINTEREST INCOMEINTEREST PAYMENTSINTERNATIONAL STANDARDSINVENTORYINVESTMENT PROJECTSJUDICIAL ENFORCEMENTLABOR MARKETLIVING STANDARDSLLCLOCAL GOVERNMENTMAINTENANCE BUDGETMARGINAL EFFECTSMARKET FAILURESMARKET TRANSACTIONSMEDIUM-TERM EXPENDITUREMEDIUM-TERM EXPENDITURE FRAMEWORKMINISTRIES OF FINANCEMINISTRY OF FINANCEMINISTRY OF LABORMONETARY FUNDPENSIONPENSION REFORMPENSION SYSTEMPENSIONSPERSONAL INCOMEPERSONAL INCOME TAXPOLICY ANALYSISPOLICY DECISIONPOLICY FRAMEWORKPOLICY MAKERSPOLICY PRIORITIESPOLICY RECOMMENDATIONSPOST-CRISIS PERIODSPOVERTY REDUCTIONPRIVATE INVESTORSPUBLIC ADMINISTRATIONPUBLIC DEBTPUBLIC DEMANDPUBLIC EMPLOYMENTPUBLIC ENTITIESPUBLIC EXPENDITUREPUBLIC EXPENDITURE REVIEWPUBLIC EXPENDITURESPUBLIC FINANCESPUBLIC FINANCIAL MANAGEMENTPUBLIC GOODSPUBLIC HEALTHPUBLIC SERVICEPUBLIC SERVICESPUBLIC SPENDINGPUBLIC SPENDING PROGRAMSREDISTRIBUTIONREDISTRIBUTIVE EFFECTSRESOURCE ALLOCATIONRESOURCE MANAGEMENTRETURNREVENUE BASEREVENUE COLLECTIONREVENUE INCREASESREVENUE LOSSREVENUE PERFORMANCEREVENUE SOURCESROAD MAINTENANCEROAD TRANSPORTSAFETY NETSAFETY NETSSECURITIES MARKETSSMALL BUSINESSESSOCIAL ASSISTANCESOCIAL CONTRIBUTIONSSOCIAL EXPENDITURESSOCIAL INSURANCESOCIAL PROTECTIONSOCIAL SAFETY NETSSTATE BUDGETSTOCKSSUB-NATIONALSUB-NATIONAL ENTITIESSUBNATIONALSUBNATIONAL ENTITIESSUBNATIONAL GOVERNMENTSTAXTAX ADMINISTRATIONTAX ADMINISTRATION REFORMSTAX BASETAX BURDENSTAX COLLECTIONTAX COLLECTIONSTAX CREDITTAX DEFERRALSTAX EXEMPTIONTAX EXEMPTIONSTAX EXPENDITURETAX EXPENDITURESTAX LAWSTAX OFFICIALSTAX PAYERSTAX POLICYTAX PRODUCTIVITYTAX PROVISIONSTAX RATETAX RATESTAX REFORMTAX REFORMSTAX RETURNSTAX REVENUETAX REVENUE MOBILIZATIONTAX REVENUESTAX STRUCTURETAX SYSTEMTAXABLE INCOMETAXATIONTAXPAYER BEHAVIORTAXPAYERSTOTAL EMPLOYMENTTOTAL EXPENDITURESTOTAL GOVERNMENT EXPENDITURESTRANSFER PAYMENTSTRANSPARENCYTRUST FUNDTRUST FUNDSTURNOVERUNTAXED GOODS10.1596/21063