Azerbaijani leasing companies offer to be exempted from income tax
Azerbaijan, Baku, Oct. 2 /Trend, A.Akhundov/
Azerbaijan Leasing Companies Association offers to exempt leasing companies from income tax, the head of the Association Elchin Ahmedov told Trend on Saturday. The Association has sent relevant proposals to the Government.
"Some of the items in the legislation on regulation of leasing issues partially do not meet the requirements, providing market development. For the development of leasing in Azerbaijan, it would be very important to introduce the 'Law on stimulating capitalization of banks, insurance and reinsurance companies' with regards to the leasing companies," Ahmedov said.
According to him, three-year tax exemptions [from payment of income tax] for insurance companies and banks will expire this year, and it is possible to consider their prolongation.
In addition, according to Ahmedov, it needs to define the scope of VAT on equipment, attracted to the leasing of foreign and domestic markets.
Deputy Finance Minister Azer Bayramov told Trend on Saturday that it needs to really assess the situation on the market and find out what hinders its development.
"Tax exemption is not a panacea. If to exempt all from taxation, then who will pay tax. It needs to work out an accurate strategy and act according to it, to really assess the situation, find out what prevents the development of the market, and not to focus only on taxation issues," he said.
According to Ahmedov, in developed countries, the need for leasing services in total GDP reaches 2.8 percent, in developing countries, the lessors cover about five percent of demand.
"The share of Azerbaijan's leasing market in 2010 was 0.4 percent, which assigns new targets for us to increase the amount of leasing assets in investments in the economy," he said.
He said the portfolio of leasing operations in the country has increased from $2.5 million in 2003 to $165 million manat in 2010.
Today, leasing services in the country are provided by AqroLizinq State Leasing Company and 22 private leasing companies and banks providing leasing services.