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Azerbaijani entrepreneurs to help reduce share of country's shadow economy

Business Materials 28 July 2020 17:23
Azerbaijani entrepreneurs to help reduce share of country's shadow economy

BAKU, Azerbaijan, July 28

By Fidan Babayeva – Trend:

During the post-pandemic period, a big number of Azerbaijani entrepreneurs will help reduce the share of the country's shadow economy and support the economic growth, the transition from shadow accounting to open accounting, Head of the Department of the Azerbaijani Center for Analysis of Economic Reforms and Communication Nijat Hajizade said in an interview with Trend.

“The improvement of tax administration in Azerbaijan and the simplification of customs procedures have played a decisive role in the fight against the shadow economy,” Hajizade added.

"The measures of combating the shadow economy under the leadership of Azerbaijani President Ilham Aliyev are intensive and comprehensive,” head of the department added. “The country's countermeasures are regulated on the basis of a strategic plan and administrative approaches are carried out on the basis of interaction with entrepreneurs."

“In accordance with the calculations of the International Monetary Fund for 2019, the shadow economy as an average is estimated at 15-20 percent of GDP in the developed countries, 20-21 percent of GDP in the member-states of the Organisation for Economic Cooperation and Development (OECD), 30-35 percent of GDP in the developing countries,” head of the department said.

“The shadow economy greatly damages economic growth,” Hajizade said. “Economic growth depends on transparency and accountability of the economy. Confidentiality in aggregate demand weakens its target in aggregate supply.”

“Thus, either an unbalanced product or the money supply is formed on the market,” head of the department said. “In this regard, commercial banks assess risk factors in a loan proposal to business entities and request transparent and accounting income."

Hajizade also added that wholesale and retail trade, transparent statistical accounting of consumption (sales) with investments, correct wages and economic indicators are potential indicators that will support the economic growth of the CIS countries and, in particular, Azerbaijan.

"As institutional measures over the past years, the State Service for Antimonopoly Policy and Consumer Market Control and the State Tax Service under the Ministry of Economy, which are the leading institutions in the fight against the shadow economy, may give effective results," Hajizade said.

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