Fiscal Administration Upgrade to Continue Without IMF's Assistance

Business Materials 7 September 2006 17:43 (UTC +04:00)

The International Monetary Fund (IMF) is not going to go on rendering technical assistance to Azeri Tax Ministry in fiscal administration upgrading. Vitaly Kramarenko, deputy director for central Asia and Middle East, IMF, told Trend the Ministry had already been assisted in upgrading VAT mechanism.

Kramarenko said the Funds recommendations positively influenced VAT collection. By the results of the half year VAT forecast has been fulfilled at 101 6 percent. High interest in this type of tax is explained with its problematic nature. Due to the continuing fiscal administration and tax control improvement measures officials of Tax Ministry say forecasts on all taxes will be exceeded by the end of 2006 Next year tax agencies are planning revision of VAT collection regulatory to form the basis for increase of this tax collection.

In particular, Tax Ministry expects the increase of tax incomes from non-oil sector due to mandatory collection of tax debts, upgrade of fiscal administration and other reforms.

The forecast for tax income for 2007 is suggested to rise by 25%. Such an amount will be received as a result of toughening the actions for control over many spheres outside tax control, said Fazil Mammadov, Tax Minister, at the meeting with Kramarenko. In Ministers opinion, these regions may also be involved in tax-imposed base in the future.

Head of IMF mission says there is a potential for raising tax incomes from non-oil sector by 25 percent. However, he said, growth of incomes should not exceed that of GDP. В"In the first half-year GDP high growth rates are observed (approx. 40 percent), while their growth in non-oil sector totaled 8.5%. Since the monetary credit aggregates increase is observed in the country and today the boom in the country leads to the economy overheatingВ", said Kramarenko.