Azerbaijan, Baku, Feb. 9 / Trend A. Akhundov /
There are broad opportunities in Azerbaijan to reduce tax rates in the future, the head of the department for economic policy, analysis and forecasting under the Ministry of Economic Development Adalat Muradov said.
"Regular tax rate decrease had a positive impact on economic growth," he told Trend today. "There are broad opportunities to use this factor for economic growth in the future."
He said that the tax revenues to the state budget increase by increasing tax rates only to a certain level. While increasing the rates above this level, tax revenues are declining.
"An increase in the tax burden in Azerbaijan by 1 percent ups tax revenues by 2.3 percent," he said. "This can be explained by the fact that the tax burden in the country is not high compared to the economic growth."
He said that the payments to the state budget through the Tax Ministry increased by 6.7 times for the last 8 years. The country's GDP during this period increased by 7 times.
"Thus, the share of tax revenues to GDP reduced from 11.5 percent in 2003 to 10.9 percent in 2011," he said. This stipulates the positive effect of tax rates on economic growth."
He said that the dynamics of consumption demonstrates the connection between tax policy and economic growth.
"Real personal income increased by 5.3 times for the last 8 years," he said. "The population's income increased by 5.4 times."