An initial scenario for 2006 draft state budget and proposals on tax corrections will likely be ready by July 1.
Following the announcement, deputy finance minister Azar Bayramov told journalists that the principal philosophy of the taxation sphere is to alleviate general tax burden and gradually reduce tax rates. “As a matter of fact, some changes will be made in income and profit taxes. Unlikely the rate of income tax will change, but there will be made changes in the taxation base [of income tax] that is applied to the amounts taxable under the maximum rate - 35 per cent,” Bayramov noted.
At present, the maximum rate of income tax is levied on the amounts exceeding the level of 3 million manats (632 U.S. dollars). Originally, it has been planned that 37 per cent of the aggregate revenues for the 2005 state budget will be provided through direct taxes, with income and profit taxes to be collected in the size of 1.06 and 1.395 trillion manats (223 and 294 million U.S. dollars), respectively.
However, the above ratio is set to reach 40.9 per cent, following the revision of the tax collections’ total, to 7.102 trillion manats (1.495 billion U.S. dollars) from the originally planned figure of 6.652 trillion manats (1.4 billion U.S. dollars). The increment of 450 billion manats (95 million U.S. dollars) is shared by an additional collection of 94 and 356 billion manats (20 and 75 million