Azerbaijan, Baku, Oct.13 / Trend, A.Akhundov /
The rate on compulsory social insurance in Azerbaijan can be increased from the current 25 to 35 percent, which is intended to be done within the pension insurance system, Chairman of the Azerbaijani State Social Protection Fund Salim Muslimov said today.
"It's necessary to increase compulsory insurance rates from the current 25 to 35 percent for functioning of the first two stages of the new pension insurance system in Azerbaijan," Muslimov said.
According to him, employees will bear the most of load when increasing the rates.
"Most of the additional payments should be made by employees. Of course, some of the need account for employers," Muslimov said.
As a participant of the European Social Charter, Azerbaijan should raise the average monthly pension to the level of 40 percent of the average monthly salary. "This level can be provided at the rate of compulsory social insurance in 31 percent. For this, we must also increase the volume of transfers from the Public budget," Muslimov said.
According to him, under the current rate of 25 percent, the level of pension is provided at 34 percent of the average monthly salary.
Currently, the rate of transfers for mandatory social insurance is formed from two sources. Employers pay a rate of 22 percent from payroll for social insurance, and three percent is deducted from the salary of the employee. The minimum wage is 85 manat.
Since 2008, the rate of social insurance transfer was reduced for persons engaged in entrepreneurial activity without establishing a legal entity, and a single rate was appointed for landowners. According to the current Law on Social Insurance, for individual entrepreneurs engaged in trade, transport, construction, the monthly mandatory social insurance is 50 percent compared to 70 percent of the minimum wage, while in other areas, the figure is 20 percent (40 percent).
For workers in family farms, the rate is six percent of the minimum wage.
Official exchange rate on Oct. 13 is 0.8018 AZN/USD.