Tax remissions to raise investors’ interest in Azerbaijan’s economy

Business Materials 31 January 2012 21:59 (UTC +04:00)

Azerbaijan, Baku, Jan.30 / Trend N.Ismayilova /

To raise interest of foreign and local investors in Azerbaijani economy it is necessary to grant tax remissions, senior manager of PricewaterhouseCoopers Azerbaijan Baku Office Arif Guliyev told Trend on Monday.

"Along with adoption of laws on corporate management and ensuring transparency of enterprises granting tax remissions, such as cancellation of interest and dividend taxations would become a serious measure aimed at raising interest of foreign and local investors," Mr Guliyev said.

"It is also possible to envision tax remissions and tax holidays for priority branches of economy," he said.

Mr Guliev also noted these may include production of equipment intended for export, activities on leasing such equipment for use in other parts of the Caspian Sea, repair and assembling for clients in other countries, creation of high-technologies, interregional trade with use of special storages in Azerbaijani under the customs control and activities in other branches from which the budget doesn't receive significant amount of money.

"Azerbaijan virtually losing nothing creates conditions for population's employment and tax payments in future," the company's representative said.

Chairman of the Central Bank of Azerbaijan (CBA) Elman Rustamov said Azerbaijan should shift tax burden in mid-term from production to consumption.

"At present it's one of the main trends of tax reforms in the world. For example, in Turkey, which has one the most dynamically developing economies, is a very high tax burden for jewelry, cars, etc.," Mr Rustamov said.

He said Azerbaijan must has tax system which should direct people for accumulation, investment and not for consumption.

"On the contrary, we should encourage production which creates jobs and raises export potential. This should be implemented through tax policy," Mr Rustamov said.

He noted level of social taxes in the country remains high.

"In our country it's about 22 per cent and in Kazakhstan 11 per cent. For encouragement of production this level also should be competitive," Mr Rustamov said.