Armenia accuses Gazprom of multi-billion tax evasion

The Armenian authorities have conducted an audit on the local Gazprom subsidiary and uncovered colossal tax violations, the Armenian State Revenue Committee (SRC) reported on Wednesday.

Gazprom Armenia, the country’s sole gas provider, gave the tax authorities “deliberately false information” in its reports for 2016-2017, as a result of which it paid “several billion” too little tax on profit and VAT, according to the SRC.

In addition, the company was involved in shady gas selling schemes. The volumes of fuel reportedly “lost during transport” increased, and the gas was written off, when in actual fact it was being sold at car gas compression stations.

Independent investigations showed that network gas losses had dropped by two thirds, whereas sales between June and September 2018 had grown by 37%.

“On the basis of the aforementioned, according to the materials drafted by the Investigative Office of the SRC, a criminal case has been filed according to section 2 article 205 of the Armenian Criminal Code,” the press release states.

“The necessary investigative and procedural activities are being carried out in order to clarify the amount of damage done to the state as a result of the abuse permitted by ZAO Gazprom Armenia, and to identify manifestations of corruption in the area of consumption of natural gas,” it continues.

Since 2016, Armenia has received Russian gas at a discounted price of $150 per thousand cubic meters. This is the price at which Gazprom sells the gas to its Armenian subsidiary. However, for end users who purchase no more than 10,000 cubic meters per month, the ultimate rate is nearly double, at around $290.

“Effectively gas comes to Armenia from Russia at quite a low price, but consumers get this gas at double the price,” Armenian Prime Minister Nikol Pashinyan said in October following talks with Russian President Vladimir Putin.

Pashinyan called for an investigation into the situation to “make the mechanism more effective”.

  Armenia, Pashinyan, Gazprom, Putin