Azerbaijan may expand application of VAT deposit account
Azerbaijan, Baku, March 14 / Trend I.Khalilova /
The Azerbaijani government is planning to expand the use of a deposit account for VAT given the effectiveness of this practice, the government told Trend on Wednesday.
Since January 2008 Azerbaijan has used a single treasury deposit account for VAT, through which all taxpayers can carry out value added tax operations.
"Today the deposit applies for payment of VAT on an accrual basis, revenues are taken into account for five days, but it's also planned to apply it on a cash basis method whereby income (expense) is recognised on the day of receipt (debit) of money," the source said.
Due to the fact that it is VAT that tax crimes are mainly linked to, as well as the fact that the introduction of a VAT deposit account has established itself in Azerbaijan, the tax administrations of other countries are willing to adopt this method.
If as in 2007 the share of the proceeds of VAT to the state budget through the Ministry of Taxes was 14.28 per cent, in 2008, after the application of the new system, this figure stood at 19.94 per cent, in 2009 - 28.7 per cent, 2011 - 37 per cent and in January, 2012 - 34.6 per cent.
In addition the actual amount of revenue to the state budget for this type of tax has increased. In 2007, charges for VAT to the budget amounted to 644.1 million manat, whereas in 2008 the figure exceeded 1.135 million manat, in 2009 - over 1.18 million manat, in 2010 - over 1.271 million manat, in 2011 - over 1.364 million manat, and in January 2012 - 259.1 million manat.
Deposit accounts for VAT is a single treasury account through which all operations such as accounting, traffic and payments to the state budget for VAT are conducted. In addition, a sub-account opens for each taxpayer which will handle all VAT operations.
The official exchange rate is 0.7864 AZN to $1 on March 14.