The increase of prices for the energy carriers and communal sector will affect two factors, Trend reports. Independent economist, Gubad Ibadoglu, stated at the meeting organized by the Economic Research Center that the decision of the Tariff Council of Azerbaijan led to the increase of prices (taking into consideration seasonal factors, particularly agricultural products and construction materials). It is also confirmed by the change of the taxation mechanism for the construction companies and automobile transport.
From the moment when the project of amendments and annexes to the tax legislation was presented to Parliament, real estate and automobiles prices increased, and our investigations also confirmed this. Taking into consideration the demand, an opportunity was created for the entrepreneurs to sell more cars, which led to a price increase for the automobiles from AZN 200-300 to AZN 1000. Ibadoglu said.
According to him, unlike prices for the energy carriers, the Government had to announce the tariffs for the communal services beforehand (the decision was made on 6 January, but announced on 8 January) so that the population could pay off their debts for the electric power, water, gas and sewerage. In such situations, differences may appear between accounts.
Concealing the decision of the Tariff Council is of great concern and the main fact is that the Government does not support its reasons. The only claim is that it is a fiscal goal to receive revenues in amount of AZN 200 mln to the State Budget, Inglaboglu said.
The second factor is the impact on the growth of the shadow economy in the country. One of the indicators of this already exists. According to the 2005statistics, the annual conception of the electric power per capita in European countries equals 1,452 kg while in 2004 it equaled 100,2 and in 2005 106,5 in Azerbaijan. It is a lag of nearly 150 times and is the indicator of the shadow economy, Ibadoglu stated.
I understand the necessity to raise the tariffs within the communal reforms, but this rise should be compensated for with social programs and an increase of pensions and salaries, he added.