Azerbaijan, Baku, Dec. 28 / Trend K.Zarbaliyeva /
Household interest income in Azerbaijani banks and non-bank credit organisations (NBCI) will be exempt from income tax till 2014.
The draft law extending the moratorium on the imposition of income tax on individual deposits in banks and non-bank credit organisations for another year was adopted at the plenary session of the Milli Majlis on Friday. The law comes into effect from January 2013.
For the first time, tax relief for deposit interest paid to people by public banks and other lending institutions was introduced in 1999. Since 2010, the moratorium has been extended for three years.
As mentioned by the head of the parliamentary committee on economic policy Ziyad Samadzade, the loss of the state budget on application of these exemptions amount approximately 60-70 million manat, but the decision is intended to support the banking system.
It is estimated that these tax incentives have increased the contributions by approximately 500 million manat.
The Azerbaijani Central Bank believes that public confidence in the country's banking sector was strengthened, as evidenced by the growth of their savings by 15.6 per cent to 4.8 billion manat. The amount of deposits with a maturity of over one year increased by 17.4 per cent. Contributions in local currency (23 per cent growth) have considerably exceeded the growth rate in foreign currency (6.5 per cent), while deposits in the regions of the country increased by 16 per cent.
The official exchange rate for December 28 is 0,7850 AZN / USD.