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Azerbaijan Oil Tax Collections to Decrease in 2009

Business Materials 3 November 2008 20:50 (UTC +04:00)

Azerbaijan, Baku, 3 November / Trend corr. N.Ismayilova/ The revenues of the Azerbaijan state budget will hike 15.5 times in 2009 as compared to 2001. That will be a result of the country's economic development and the efficiency of the arrangements intended to improve the tax legislation, according to the draft state budget 2009, which has been submitted to the Parliament.

State budget revenues are forecasted to comprise 27.9% or AZN 12.177bln in 2009, which is up 16.1% or AZN 1.69bln from 2008.

The forecast for the Ministry of Taxes will rise 6.9% (AZN 370mln) to AZN 5.75bln. The tax collections in the oil sector will comprise AZN 2.68bln, which is down 7.6% (AZN 220mln) than 2008. Tax revenues in the non-oil sector will increase 23.8% (AZN 590mln) to AZN 3.07bln.

The percentage of the collections through the Ministry of Taxes in the budget revenues will total 47.2%.

Proceeds from the State Customs Committee (SCC) are projected at AZN 1.3bln, which represents an increase of 17.1%, or AZN 190mln as compared to the forecasts for 2008. The share of the SCC in the general budget revenues is 10.7%

The forecast for the State Committee for State Real Estate Management by reference to a lease of state property lies at the level of AZN 4.7mln. Compared with 2008, this amount increased by 34.3% (AZN 1.2mln).

Budget revenues from other sources are projected at AZN 5.12bln. Of these, AZN 4.915bln (40.4%) will be transferred from the State Oil Fund, AZN 137mln (1.1%) from extra-budgetary funds of state organizations; AZN 70.3mln (0.6%) from other sources. These incomes exceed the forecast for 2008 by 28.4% (AZN 1131bln).

Profit tax allocations to the budget are expected to comprise 18.2% of total state budget revenues, or AZN 2214bln, which is down 9.6% (AZN 236mln) as compared to 2008. The main reason for the reduction of tax deductions is to reduce the share of oil companies in oil production under PSAs.

Revenues from the tax on individuals' income are projected at AZN 0.9bln, or 7.4%, which is up 13.2% (AZN 105mln) than forecasted for 2008.

Projected revenues from VAT amounts to AZN 2295bln, or 18.9% of total revenue, which is up 21.8% (AZN 410mln) than forecasted for 2008. Of this amount of revenues, tax authorities provided AZN 1.395bln or 60.8% and customs authorities provided AZN 900mln (39.2%).

Excises will comprise 4% of the total state budget revenues, or AZN 485mln, of which 392mln is the proceeds from the tax authorities and 93mln from the customs authorities.

Incomes from property tax and land tax will make up 1.4% of budget revenues, or AZN 170mln, which is down 21.4% (AZN 30mln) than in 2008. Growth is provided by expanding the base, which is levied property tax, by increasing the rate of collection, as well as by the expected economic activity.

Subsoil tax collections are expected to total AZN 137mln and 1.1% in the total revenues of the state budget.

Revenues from simplified tax are projected to total AZN 78mln, which is up 23.8% or AZN 15mln than in 2008.

Incomes from road tax with the percentage of 0.3% are set in the amount of AZN 36.3mln, up 23% (AZN 6.8mln) than forecasted for 2008. Of these, AZN 32mln (88.2%) are the proceeds from the tax authorities, AZN 4.3mln from the customs authorities (11.8%). Increase in revenues from road tax is due to the rise in the number of cars in the country, as well as due to removing of the preferences on the tax with respect to the transporters from Iran.

Customs duties comprise 2.5% of budget revenues, and they are projected at AZN 302.7mln. The share of royalties from paying duty will make up 0.5% (AZN 60mln).

On 3 November, the official exchange rate totalled 0.8087 AZN/USD.

The correspondent can be contacted at [email protected]

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