Azerbaijan, Baku, Jan. 27 /Trend/
In accordance with the recent decree issued by the Azerbaijani Cabinet of Ministers on Jan. 25, some goods and equipment imported into the country will be exempted from VAT and customs duties. Trend interviews Adalet Muradov, a department head at the Economic Development Ministry, to learn more about the decree and its significance for the country's non-oil sector.
Q: Could you tell us about of the new decree and its major goals?
A: One of priorities of the economic policy of Azerbaijani President Ilham Aliyev is to ensure economic diversification and the stable development of the non-oil sector. In accordance with a state program, a great deal of attention is paid to development in this field. The country's agrarian sector has been exempted from taxes and farmers are given equipment, fertilizers, fuel and other necessary means on privileged terms, and subsidies are provided from the state budget.
A major part of the privileged loan focuses on agriculture production and the food industry. Important projects are being implemented in these fields with the participation of Azerbaijani investment companies. The Cabinet of Ministers decree is an important step in this direction. The decree targets the intensification of state support to develop the non-oil sector, and enhancing the application of new and upgraded technologies.
VAT exemptions were applied earlier on some goods and equipment imports. However, by this decree, the list was essentially expanded. The essence of the decree is that the government is exempting some goods and production equipment from taxes and customs duties. By simplifying the import of these items, the government is encouraging the realization of production projects in the non-oil sector and intensifying their implementation.
Q: What products does this decree cover?
A: The decree covers most goods and production equipment that are used in the agriculture and food industry. For instance, cattle for economies, seeds for forages, fertilizers, water treatment devices, irrigation devices, trailers for tractors, vehicles for cultivating and exploiting land, equipment for milk refining, incubators, equipment for meat processing and poultry, and equipment for producing bread and rolls and macaroni.
Q: What impact will these privileges have on the development of the non-oil sector?
A: Exempting these goods from the 18-percent VAT and customs duties is an efficient resolution to the poor circulation of entrepreneurial funds. At the same time, this will help entrepreneurs to purchase more goods and equipment within their existing financial opportunities.
It is necessary to pay attention to the fact that saving money on equipment purchases will enable them to reduce investment project costs by 10 percent. Thus, the direct cost of goods will decrease, whilst competitiveness will boost.
The measures will be effective from March 1, 2011 and will facilitate the use of state-of-the-art equipment and new technologies in the agriculture and food industry, improve technical equipment, supply qualitative food to the population and expand non-oil exports.