Taxes Minister: No need to revise rates and limit on income tax in Azerbaijan
Azerbaijan, Baku, June 8 / Trend I.Khalilova /
Azerbaijan does not see the need for reducing income tax rates and changing the short term monthly taxable income limits, Taxes Minister Fazil Mammadov said on Tuesday.
He said that "Today, a monthly income of 80-85 percent of taxpayers does not exceed 2,000 manat, thus it is inappropriate to increase the bar".
The monthly income of an individual is taxed at 14 percent in Azerbaijan, if the monthly taxable income does not exceed 2,000 manat. If income exceeds 2,000 manat then taxpayers are required to pay 280 manat in addition to 30 percent of the total income.
Since Jan.1, 2010, the maximum income tax for salaried workers declined from 35 percent to 30 percent. For individuals engaged in entrepreneurial activities, without having an established legal base, the maximum income tax has been reduced from 35 percent to 20 percent.
Mammadov believes that reducing the tax rate for businesses to 20 percent is an important step.
"Now employees of foreign companies and banks that receive high salaries and bonuses fall under the maximum income tax rate," Mammadov said.
Recently, the American Chamber of Commerce in Azerbaijan (AmCham) presented proposals to parliament on changing the Tax Code. AmCham proposed to reduce the maximum rate on income tax by 20 percent for individuals and to exempt those with salaries of up to 500 manat.
During discussions of the draft amendments to the Tax Code last week, Deputy Chairman of the Parliamentary Economic Policy Committee Chingiz Asadullayev also proposed to reduce the income tax rate from 14 to 12 percent. He said that such a move would increase the number of income tax payers.
"To legalize questionable income and eliminate double-entry bookkeeping, it would be more appropriate to increase the wages that are exempted from income tax for physical entities from 75 to 100 manat, as it will not cause much damage to the state budget," Asadullayev said.