Income Tax Exemption to Improve Investment Climate in Azerbaijan, Participant of Market Says
Azerbaijan, Baku, 29 October / corr Trend U.Ismayilova/ Tax exemption of income, which is allocated to capitalization, will enable improvement of investment climate for Azerbaijani insurance, reinsurance companies and banks, Jamil Melikov, CEO of MBASK insurance bank.
"Foreign shareholders will become interested in investing upon tax release and they will receive their dividends in time," Melikov, who is also CEO of the Azerbaijan Insurers' Association, said.
"Insurance and reinsurance companies and banks will win due to the government's decision. They will allocate income to capitalization and not wait for funds from shareholders that plays an important part in development of business.
This measure of government is timely, taking into consideration present liquidity of financial sphere, he said.
"Insurance, reinsurance companies and banks can increase the level of capitalization twice due to it," Melikov said.
Last week, the parliamentary commission on economic policy discussed the offer on tax exemption from 1 January 2009 of Azerbaijani banks, insurance and reinsurance companies from the profit, which is directed to increase capitalization. The main aim of adoption of bill is to speed up the rates of development of financial sphere, increase the quality of services in bank and insurance sector and stimulate increase of capitalization of companies.
Income tax in the country makes up 22%. There are 45 banks, 28 insurance and one reinsurance companies in Azerbaijan.
MBASK, operating since 1992, renders 29 types of insurances services, with 4 of them compulsory. The authorized capital of the company has totaled AZN 2mln. The European Bank for Reconstruction and Development (EBRD) purchased 30% of MBASK in 2005. According to the Azerbaijani Ministry of Finances, the company's premiums totaled AZN 15.72mln and made up AZN 4.5mln in January to September.
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