IFC's project on development of leasing in Azerbaijan prolonged by a year
The International Finance Corp. and the Swiss State Secretariat on Economic Issues (SECO) made a decision on prolongation of the implementation term of the project on technical assistance to development of leasing activities in Azerbaijan till April 2007, Trend reports quoting Elchin Ahmadov, the head of the project.
According to Ahmadov, the first phase of the project, started in May 2003, completes in April. The further implementation of the projects will be carried out at the expense of saved funds, allocated by SECO for implementation of the first phase in the amount $1.3m.
Ahmadov thinks that the tasks of the projects are practically fulfilled, particularly, improvement of legislation, improvement of quality and quantity indicators at leasing market, establishment of leasing association, organization of specialized trainings for financial sector, entrepreneurs and representatives of state bodies. During 2006They suppose to analyze the current state of the legislation and put forward proposals on further improvement.
18 changes have been injected to the Civil Code since start of the project. Earlier the
legal base regulating leasing activities in Azerbaijan was determined by the Law on leasing service dated to 1994.
Azerbaijan was single country in CIS, which adopted the Law with preferences for leasing activities. Nevertheless, they were liquidated after adoption of Tax Code that led to increase of requirement of leasing companies for banking loans. From 2003 the item envisaged payment for import of equipment, which is subject of leasing, was deleted from the Code.
According to expert Fuad Mammadov, the government released companies from VAT and custom duty at import of some goods, which are subject of leasing. Payment on leasing is also released from VAT, leasing itself - from tax.
The major problems of local leasing companies are imperfection of business accounting, liquidation of speeded up amortization, limited activities sphere.
According to Ahmadov, in contrast to other countries leasing in Azerbaijan may be envisaged not only development of entrepreneurship, but also consumer and social purposes.