Baku, Azerbaijan, Sept. 19
By Anvar Mammadov – Trend:
There is no need to introduce new taxes or increasing tax rates in Azerbaijan, Mohammed El Qorchi, IMF mission chief for Azerbaijan, said in an exclusive interview with Trend.
He said that the set of taxes and tax rates in Azerbaijan are generally in line with emerging market norms.
“The main issue is that the non-oil fiscal balance contains a large deficit which needs to be reduced over time,” El Qorchi added.
“Good tax policy stresses the use of only 1 or 2 VAT rates with a few exemptions,” El Qorchi said. “However, in Azerbaijan there has tended to be a high number of exemptions and somewhat weak tax administration. This is reflected in relatively low tax yield efficiency ratings—meaning the tax revenue intake is lower than expected given economic activity and the set of existing rates.”
“In this context, the Azerbaijani authorities aim to raise the non-oil tax revenues by broadening the tax base through fostering new businesses, simplifying the tax system, and encouraging compliance via accessible e-services,” he added. “Expenditure pressures will also need to be reduced.”
El Qorchi added that a tax system that promotes small and medium enterprises has to be transparent with minimum business interference.
“In this regard, the country’s authorities have made great progress,” he said.
“Formal labor contracts are registered in a database shared across government agencies,” he said. “Business and individuals can now pay taxes and custom duties via e-services. Azerbaijan’s Ease of Paying Taxes indicator has increased from 103rd in 2011 to 34th in 2016 based on the World Bank’s Doing Business Survey.”
Azerbaijan’s Taxes Ministry transferred 4.35 billion manats (official exchange rate for Sept. 19 is 1.6370 AZN/USD) to the state budget in January-August 2016, which is by 0.3 percent more than the forecast.
According to the data, Azerbaijan’s state budget revenues reached 8.281.5 billion manat in January-August 2016 or by 22.4 percent less compared to the same period of 2015, while expenses – 9.348.5 billion manat or by 13.4 percent less compared to the same period of 2015.
The state budget deficit was estimated at 1.067 million manat or 2.8 percent of GDP.
Revenues of Azerbaijan’s state budget have been approved in the amount of 16.822 billion manats, expenses – 18.495 billion manats for 2016.
Revenues from the country’s Taxes Ministry to the state budget are expected in the amount of 7.01 billion manats or 41.7 percent of total budget revenues in 2016. Budget forecasts are formed on the basis of oil prices at $25 a barrel.
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