Finance Ministry Considers Efficient Application of VAT-depositary Account in Azerbaijan
Azerbaijan, Baku, 25 February / corr Trend I.Khalilova / The Azerbaijani Finance Ministry confirmed the efficiency of applying the system for accumulating VAT revenue by a centralized order, because in the first month alone of its use transfers of VAT to the public budget increased by 60-70% compared to a similar period of 2007, Azer Bayramov, the Deputy Finance Minister said. [Since 1 January 2008 VAT is accumulated in a unified deposit account at the State Treasury of Azerbaijan].
In January revenue from VAT through the Tax Ministry line made up AZN 50.751mln amid a total revenue of tax collections in the amount of AZN 764.466mln.
"Indeed, the first month of the year is not an indicative period and wider coverage is required for detailed analysis. So, by analyzing the situation it will be possible to speak about the possibility of cutting the VAT rate from next year," Bayramov said.
According to Fazil Mammadov, the Azerbaijani Taxes Minister, a cut in rate of this tax in 2009 depends on the efficiency of this system.
"We will analyze the results of the first quarter and should the method be efficient, a possible cut in the VAT rate by 1% will be offered from next year," Mammadov said. However, over subsequent years this issue will be reconsidered."
At present the VAT rate in Azerbaijan is 18%.
According to initial research, the optimum rate of VAT in the current tax climate in the Azerbaijani economy should be 14-15%.