From 2001 to 2005 the total sum, concealed from payment of VAT, comprised around 17trln manats, Natig Amirov, the deputy Taxes Minister, said to a news conference dedicated to changes included into the Tax Code in relation to registration of VAT, Trend reports. According to Amirov, it was revealed through database of local tax bodies. Thus, the Ministry prevented tax evasion in the amount of 3,132trln manats as VAT.
Serious measures were taken in regard to infringers at expense of the administrative resources of the Ministry over the last years. In 2005 the Ministry filed criminal case in regard to 281 companies and provided 35bn manats payment to the public budget to cover the damage.
In 2005 two employees of tax establishments were arrested. Negative facts were also revealed in regard to employees of Borchalybank, the Ganja branch of Mughanbank and Zaminbank.
The first stage of the check-up completed in relation to toughening of registration of VAT-payers and measures on struggle with debtors. The Ministry revealed 1,436 infringers acting illegally as a result of the measures taken by tax bodies. They will be struck off the VAT register i.e no state enterprises and budgetary organizations will be able to accept their invoices after 31 January. The Ministry placed the list of the enterprises on the website. Financial sanctions will be used in regard to them in case of their functining on base of invoices.
The Ministry also takes measures in regard to other infringers.
Zaur Fatizade, the head of the Economic Analysis Department under the Taxes Ministry, informed about changes into the tax legislation and consequently threatening of financial sanctions. Taking into consideration the recommendations by the International Monetary Fund and the proposals by the Taxes Ministry, from 2006 control over voluntary registration of VAT-payers was threatened. The compulsory term is to submit additional information about quarter circulation, objects, budgets, finance sources. Tax bodies are due to check up the information during 30 days. If the information is true, the tax bodies send notification of registration to tax-payer. The major change included into the Tax Code is liquidation of registration in case of non-payment of arrears during 3 months.
According to Amirov, the amount of the sum, concealed from payment of VAT, exceeds 90% of the total circulation, concealed from the public budget. VAT is applied in Azerbaijan from 1992, but invoices on VAT are used in the country after coming of Tax Code into force. It means that mutual settlement on the tax can be carried out only through invoice. Nevertheless, from 2002 problems evolved in relation to establishment of one-day enterprises using invoices to evade VAT payment to the public budget both in the European and CIS countries