Lithuanian State Tax Inspectorate: Lithuania impressed by Azerbaijani tax reforms (INTERVIEW)

Business Materials 6 May 2011 18:16 (UTC +04:00)
Azerbaijan is expanding bilateral ties with foreign tax administrations.
Lithuanian State Tax Inspectorate: Lithuania impressed by Azerbaijani tax reforms (INTERVIEW)

Azerbaijan, Baku, May 6 / Trend I. Khalilova /

Azerbaijan is expanding bilateral ties with foreign tax administrations. A delegation led by head of the Lithuanian Finance Ministry's State Tax Inspectorate Modestas Kaseliauskas is in Baku to discuss cooperation with Lithuania in taxation. A technical cooperation agreement in taxation between Azerbaijan and Lithuania was signed during the visit.
Trend interviewed Lithuanian Finance Ministry State Tax Inspectorate head Modestas Kaseliauskas.

Q: What is the role of the meetings in this format in terms of Azerbaijan-Lithuania ties?

A: These are very important meetings. The signing of the agreement is also of great importance. All this gives an impetus to cooperation not only at a high level, but at the level of our organizations and certain specialists. In general, Lithuania's policy is to stand on two "legs" -- one leg is on the West and the other on the East.

Q: How do you assess investment cooperation between Azerbaijan and Lithuania. How do the four agreements signed as a whole in the tax field contribute to expanding mutual investment?

A: They promote investment growth. I think the exchange of investments and other investments at the business level is increased. The signing of these agreements contributes to the protection of investments and all taxpayers who do not violate the law and want to establish business legally.

Today, the concerned services exchange information on a regular basis. This process becomes more intense. I think it is beneficial and fair to taxpayers who do business in Lithuania.

Q: What tax incentives have been introduced for Azerbaijani investors in Lithuania?

A: There are general rules for all investors in Lithuania.

Q: How will the agreement on technical cooperation between the tax administrations of Azerbaijan and Lithuania affect to future relations in taxation?

A: I think that the cooperation between our two countries must reach a practical stage - cooperation in specific projects. In particular, we have the opportunity to share experience in projects financed by the EU. Our countries can learn from each other and gain experience in specific projects. Lithuania is ready to provide any assistance in this area.

Q: The second meeting of the Azerbaijan-Lithuanian intergovernmental commission for economic cooperation is expected to be held by late 2011. What is expected from this meeting? How do you assess its role in the development of bilateral cooperation?

A: I can appreciate the role of the commission because the ties between our two countries develop rapidly, comprehensively and effectively. Many meetings are held at various levels between our respective heads, bureaucrats and politicians.

Q: How well did you manage to get acquainted with Azerbaijan's tax system?

A: We have been studying Azerbaijan's tax system for two days. But this is not our first time. We met on several occasions at international level. We know about the achievements of Azerbaijan's tax system. I have been working for the tax authorities for 12 years. I have headed the Lithuanian Tax Inspectorate six years.

So, I can assess the situation. I am impressed by the scope and rate of reforms. To be more specific, you have a very strong department dealing with large taxpayers. This corresponds to the European level in terms of composition, functions and technical support.

The call-center also operates well. Its work is based on modern management principles. The new IT system is also impressive. Our country created it gradually. Each function was created separately. Large-scale work was carried out in your country rapidly within a single project. It is very impressive.

Q: How does Lithuania solve the issue of preventing tax evasion?

A: It is a big problem in all European countries. It is very sharp in countries which suffered from an economic recession because many taxpayers have moved to a shadow economy in these countries. We had two long sessions on cooperation with the International Monetary Fund.

We work comprehensively in these areas. Implementing this program has increased tax revenues that can be assessed even in fiscal revenues. Tax revenues increased by 17 percent during the first quarter compared to 2010. Tax revenues were at 6 percent less in 2010 than in 2009.

Q: Are there any directions in the tax area, where Lithuania would like to draw the experience?

A: These are some areas. For example, Azerbaijan surpassed us in the "single window" system because it is impossible to launch a business in our country so rapidly. There is no well-established process as in your country.

Q: Which areas have been determined for future cooperation with the Azerbaijani Tax Ministry?

A: There may be further cooperation between our countries' tax administrations in exchanging experience at a technical level. I think Azerbaijan will be interested in the process of universal declaration, as well as servicing taxpayers in our country because we have some interesting developments in this area. Of course, cooperation will continue in combating the shadow economy. I think specific cases will be considered and specific information on taxpayers will be exchanged.

Q: What are your impressions about Azerbaijan? What was your view about our country changed after this visit?

A: This is a very rapidly developing country. You feel energy in the air. Everything moves and revolves. Active construction is underway.