No need to reduce tax rates to attract investment in Azerbaijan
Azerbaijan, Baku, Nov 24 /corr Trend I.Khalilova/
Economic and political stability in Azerbaijan will attract investment to the country, said Fazil Mammadov, Minister of Taxes in Parliament during the discussion of the draft state budget for 2012 and subsequent three years on Thursday.
"Economic stability and Azerbaijani internal and external policy is a better basis for attracting investment into the economy than tax cuts," Mr Mammadov said, commenting on the proposals of those MPs who want to reduce tax rates.
According to Mr Mammadov, the country's tax rates have been lowering in recent years. Income tax rate was reduced from 22 to 20 per cent and VAT from 20 to 18 per cent. At the same time, he said the VAT rate in the Ukraine is 25 per cent, 20 per cent is in Russia ,Turkmenistan and Belarus, 25 per cent is in Tajikistan, 15 per cent in Georgia, and 26 per cent in Armenia.
"The tax burden in Azerbaijan is at an acceptable level," he added.
According to Mr Mammadov, it was noted that during the global financial crisis in 2008, the Azerbaijani economy demonstrated its stability. The economy and banking system of its neighbours, including the Caspian countries were hit by the crisis.
The Azerbaijan banking system has shown growth and the government has taken adequate measures, including allowing banks, insurance and reinsurance companies to set a portion of tax against profits for capitalisation.