VAT-Accounts System Might Be Introduced Starting from Mid 2007

Business Materials 20 December 2006 17:15 (UTC +04:00)

In order to improve the system on administering VAT, the Government will continue work on working out the system on applying VAT-accounts. Fazil Mammadov, Azerbaijan Taxes Minister told Trend that it might be introduced in the middle of 2007, since the above-mentioned proposal had been put forward as far back as three years ago.

We have discussed the issue in details, though an item stipulating VAT-accounts application system was left out from the project. However we have not gone far from this issue. In order to finally elaborate the system, we need time due to a great number of technical moments in the banking system, as well as the tax payers turnover funds, said the Minister.

According to him, the most important is that the above-mentioned proposal had been seen and submitted to the Parliament of the Country. In order for the system to work efficiently, the mechanism should be elaborated in details. The CAT-accounts system envisages collecting VAT to the State Budget, as well as the turnover of the means of the taxes via separate current banking accounts of the VAT tax payers.

Applying the VAT-accounts system will allow increasing VAT returns to the State Budget at a rate of 30-50%. The rate of VAT in Azerbaijan is 18%.

Over 2001-2005, the tax payers kept $3.4 bln in taxes through applying false accounts-invoices. At the same time, Azerbaijan Budget did not receive VAT returns at the amount of 626,4 mln. AZN.

The Taxes Ministry is expected to collect VAT returns at the level of 580 mln. in the country in 2007.