Azerbaijan to extend moratorium on taxation of dividends on bank deposits
Azerbaijan, Baku, Oct. 20. / Trend N.Ismayilova /
Upon Azerbaijani President Ilham Aliyev's legislative initiative, the country's parliament has received a bill on extension of the moratorium on taxation of dividends on bank deposits, Chairman of the parliamentary permanent committee Ziyad Samadzade said.
This will give an additional incentive for investors whose income from investments will be free from taxation, as well as positive impact on the activities of banks, which will increase the volume of deposits, which in turn will increase the amount of funds for lending and subsequently affect the bank's profits, Samadzade said.
Samadzade said that the parliament is expected to approve this bill next week. The bill will strengthen public confidence in the banking sector.
First tax breaks for interest on deposits paid by individuals to banks and credit organizations, dividends on investment securities and income from interest were introduced in 2001 for three years, but later in 2003 and 2007 tax credits were extended for three-year period.
As of Sept. 1, the deposits of individuals hit 2.024.1 million manat as compared to 1.999.3 million manat on Aug.1 and 1.903 billion manat in January and 1.826 on Aug.1, 2008. Deposits of individuals increased by 1.2 percent in August and by 6.3 percent in January to August. Deposit accounts of individuals rose by 10.8 percent in annual calculation.
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