IMF Recommends Azerbaijan to Cut VAT-Free List

Business Materials 7 September 2007 12:14 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova / The International Monetary Fund (IMF) has recommended the Azerbaijan Government reduce their list of import goods free from value added tax (VAT) and reconsider standards to regulate this tax, Vitaliy Lramarenko, the Deputy Director of the IMF Department for Near East and Central Asia, who headed the current IMF mission, said on 6 September during his visit to Baku.

"This will affect the volume, as well as eliminate tax evasion," Kramarenko said.

"The Taxes Ministry has appealed for technical assistance to strengthen VAT administration and a decision is yet to be adopted," he stressed. The Ministry has received assistance to improve the system for VAT calculation and IMF's recommendations have impacted positively on this.

Next year the tax department is planning to inject changes in the legislative acts to improve the VAT registration by implementing VAT accounts at different banks and a cut in tax rates, which is believed will lead to an increase in the collection of VAT in 2008.

At present VAT rates comprise 18%.