Tax records in Armenia highlight the government’s challenge in trying to disentangle the country’s economy from Russia. The single largest taxpaying entity in Armenia, records show, is an electronics retailer that appears to generate a large share of profits from exports to Russia.
Since Azerbaijani forces reconquered Nagorno-Karabakh, the Armenian government has moved to distance itself from Russia, which many Armenians believe failed to live up to security commitments to defend Armenia’s interests. Politically, Prime Minister Nikol Pashinyan has been quick to bolster relations with the European Union and United States. But making a political shift is proving a faster process than reorienting the Armenian economy, which has long been focused northward toward Russia.
Trade with sanctions-strapped Russia has proven highly lucrative for many Armenian businesses, which have reportedly adapted to acting as middlemen for Russian consumers cut off from direct access to Western goods. No entity seems to have benefited more than Mobile Center, an Armenian mobile phone and electronics retailer linked to local businessman Samvel Aleksanyan. The company’s revenue, allegedly boosted by exports to Russia, was such that it has surpassedArmenia’s largest mining company to become the largest taxpayer in Armenia, in terms of monetary contribution made to state coffers.
According to the Armenian government’s State Revenue Committee (SRC), the agency collected over $51 million (20 billion Armenian drams) from MobileCenter during the first quarter of 2024, three times higher than the taxes paid by the company during the same period the previous year. Prior to 2024, the company had not ranked among Armenia’s top taxpaying entities.
The overall total of tax revenue gathered by the state during the first four months of 2024 reached about $846 million (330 billion drams).
Mobile Center’s tax payments topped Gazprom Armenia, the Russia-owned national gas distributor in Armenia, and Zangezur Copper and Molybdenum Combine, another company in Armenia with strong Russian ties.
Armenia’s trade turnover with Russia skyrocketed following the invasion of Ukraine, with the country coming under wide suspicion of assisting Russia in sanctions evasion. Armenia’s exports to Russia tripled in 2022 and doubled during the first half of 2023. Last fall, Armenian government officials said Russia accounts for almost 40 percent of Armenia’s annual exports.
Another business, Yerevan City supermarket chains, also controlled by Aleksanyan, made it to the top 10 taxpayers list. The list also included two local tobacco companies, electronics and household stores, a telecommunications company and the Russian E-commerce firm Wildberries.
In addition to having the largest share of Armenia’s foreign trade, Russia exerts influence over the Armenian economy in other ways, such as ownership of strategic assets. For example, the Russian energy giant Gazprom’s Armenian affiliate, Gazprom Armenia, enjoys a monopoly over the natural gas supply. Russian Railways, meanwhile, controls the country’s railroads.
