Baku, Azerbaijan, Feb. 8 / Trend /
Leyla Abdullayeva, Trend Analytic Center Expert
Thanks to competent work in the area of reforming business regulations, Azerbaijan has made significant progress in business environment development.
As of Tuesday, the Tax Ministry has started e-registration for legal entities, which is the next move to push small and medium enterprise development in Azerbaijan.
E-registration occurs without state duties and there is also no need to notarize the application or pre-paid share capital. A legal entity can enter personal data, its head and sphere of activity, and place an e-signature. E-signatures will reduce the number of procedures from six to three and the number of required documents from seven to two. The registration process will be reduced from three days to a few minutes.
The e-registration system for individuals engaged in entrepreneurial activity started on July 1 and reduced the registration period to 15 minutes.
The introduction of online taxpayer registration saves both time and money for the population, provides transparency to the tax authorities, and also increases the number of registered taxpayers through the Internet.
According to the ministry, e-registration was used by 10,075 people from July to December, representing 34.5 percent of the total number of taxpayers registered. One-third of those who underwent online registration live Baku and the rest in the regions. Since early 2012, the proportion of taxpayers registering online amounted to 49.6 percent.
It is also important to note that the improvement of the business climate is evolutionary in nature. For example, Azerbaijan in January 2008 the "single window" system for start-up registration, which reduced the number of required procedures from thirty to six and reduced by half the required of costs. The procedure for opening a new business has been simplified thanks to the introduction of a single business registration body, whose duties are assigned to the Tax Ministry.
The analysis showed that with the introduction of the "single window" system in Azerbaijan, the number of entrepreneurs who passed state registration started to sharply increase. As a result, 57,576 individual entrepreneurs were recorded in the country in 2011.
The new system made it possible to reduce the number of procedures for registration five times and the registration period by 20 times. Previously, it was required to pass 15 procedures at various ministries to start a new business, to provide 33 documents, and the registration period lasted 72 days. Today, it only takes five days.
Azerbaijan also became the first country in Eastern Europe and the CIS to apply e-invoices. Entrepreneurs used to spend on tax returns 952 hours per year. Now they spend 375.5 hours. Accordingly, entrepreneurs have more than 500 additional hours for business activities at their disposal.
Yet the potential for accelerating small and medium business development is not being fully used. The number of enties engaged in business is lower than the desired figure. Thus, reforms are needed to further improve the business climate and it is necessary to increase the share of small and medium businesses in employment and GDP up to international standards.