Armenia clears taxi drivers’ debts, critics warn of risky precedent

By Lia Avagyan

Armenia has approved a law wiping out long-standing state duty arrears owed by thousands of taxi drivers, a move the government says corrects past inequities but which economists and drivers who paid on time warn could undermine tax discipline.

The law, which entered into force on Dec. 15, cancels unpaid state duties and penalties accumulated by about 5,000 individual taxi drivers between 2015 and June 29, 2019, according to an analysis by Ampop.am. The drivers had provided licensed passenger transport services but failed to pay the required state duty during that period.

In financial terms, the state is foregoing claims of more than 1.34 billion drams (about $3.53 million), including roughly 927 million drams ($2.44 million) in unpaid duties and 415 million drams ($1.09 million) in penalties, Ampop.am reported.

The bill was passed by parliament on Dec. 4 with 86 votes in favour, eight abstentions and no votes against, after being introduced by the government through the Ministry of Territorial Administration and Infrastructure.

Government rationale

Officials argue the amnesty addresses distortions created after the taxi state duty was abolished in mid-2019. While some unlicensed drivers benefited from earlier relief, around 5,000 licensed drivers who had not paid the duty were left facing enforcement and court proceedings, the ministry says.

The government also frames the measure as an incentive to formalise the sector. Since September 2024, most taxi services have operated via online platforms with transparent payments and tax oversight. Officials say more than 90% of the sector is now visible and regulated.

Tax authorities estimate that 60,000–65,000 individuals are currently registered on taxi platforms, and that these platforms alone will generate about 330 million drams (around $0.87 million) in state duties by the end of 2025.

Criticism and fairness concerns

Critics question whether the decision is fair to drivers who complied with the rules. Between 2015 and 2019, there were 10,950 licensed taxi drivers in total, Ampop.am found, meaning nearly half paid nothing while the rest met their obligations in full.

Economist Suren Parsyan told Ampop.am that repeated amnesties risk sending the wrong signal. “Such decisions discourage tax discipline. Those who paid for years end up in worse conditions than those who did not,” he said, warning that expectations of future write-offs could encourage non-payment ahead of elections.

He also linked the timing to Armenia’s political calendar, noting that parliamentary elections are due in the coming months and that taxi drivers interact daily with a wide cross-section of the public.

The government rejects the accusation, saying the move is not a “gift” but a correction of past administrative inequality. Deputy Infrastructure Minister Armen Simonyan told Ampop.am that the amnesty applies to drivers who had at least partially complied in the past and is meant to draw remaining activity out of the shadow economy.

The weak payment discipline is not limited to the taxi sector. In 2024, around 31% of 937,000 administrative fines nationwide went unpaid and were transferred to enforcement services. In the first ten months of 2025, about one in five administrative decisions also remained unpaid.

Against this backdrop, critics argue the taxi amnesty risks reinforcing a belief that debts to the state can eventually be erased, raising broader questions about tax fairness and trust in public institutions.