Specific Weight of Exemptions in Import to Azerbaijan Decreases
Azerbaijan, Baku / corr. Trend I.Khalilova / The State Customs Committee of Azerbaijan (SCC) highlights the decrease of the specific weight of the exemptions from customs tariffs and taxes. The SCC Chairman, Aydin Aliyev, said that over the recent years, the share of the exemptions in the import had reached 65-70% due to the realization of oil and gas projects because according to the terms of the Production Sharing Agreements (PSA), the merchandises imported within the oil contracts are exempt from paying custom taxes and tariffs. However, in January 2007 the specific weight of the exemptions in the import decreased up to 45% due to the completion of the construction works within Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum pipelines.
"After review of the situation, we were liable to increase the transfers to the State budget and as a result of amendments to the State budget, the plan on customs collections was increased by AZN 140 mln," Aliyev said. He considers that each year the fiscal functions of the customs bodies expand. If the SCC had transferred $897.000 to the State budget in 1992, presently the customs bodies' transfers amount to almost $900 mln.
The exemptions are not linked with only oil contracts, but also with free trade zone. The share of only Russia in import is nearly 20%. The trade operations with Ukraine, Kazakhstan, Georgia are also made under exemptions. Taking into consideration that the traditional sale markets for the Azerbaijani commodities and services are CIS countries, the Country signed agreements within the creation of the free economic zone. According to these agreements, the countries are exempt from paying customs duties.
According to the world practice, the privileges on customs tariffs do not justify themselves within three years, they are ceased.