Azerbaijan, Baku / corr. Trend U.Ismaylova / The Head of the Legislation and Methodology Department of Taxes Ministry, Shamil Arabov, said that the security checks of VAT accounts which are presently devised at the Ministry will not be effective enough.
The proposal regarding VAT accounts was devised three years ago to improve the VAT administration system. Applying the system of VAT accounts will provide an opportunity to increase the State budget incomes linked with this type of taxes by 30-50%. Presently the VAT tariffs in Azerbaijan equal 18%.
Arabov said that the other alternative envisages issuing security checks at a nominal cost of AZN 100 or more. "During the operation in amount of AZN 100, the entrepreneurs will pay off AZN 100 in cash and check totaling AZN 18 for VAT," he said. In addition, Arabov did not exclude the possibility to use falsified accounts which would lead to huge financial maneuverings. This system is therefore considered inefficient.
In 2001-2005 through using falsified invoices, the taxpayers hid nearly AZM 3.4 bln from VAT. For the reported period, the State budget of Azerbaijan lost VAT revenue in the amount of AZM 626.4 mln. In 2007 the State budget income from VAR in line with the Taxes Ministry is forecast at the amount of AZN 580 mln.