WB: It is essential to monitor, evaluate tax breaks and exemptions in Azerbaijan (Exclusive)
Baku, Azerbaijan, Sept.16
By Leman Zeynalova – Trend:
It is essential to monitor and evaluate tax breaks and exemptions in Azerbaijan, Sebastian Molineus, World Bank Regional Director for the South Caucasus said in an exclusive interview with Trend.
“Over the past couple years, the tax reform measures undertaken by the government of Azerbaijan have taken on new momentum. The World Bank, with the financial support from the Swiss State Secretariat for Economic Affairs (SECO), is providing technical assistance to the Ministry of Taxes of Azerbaijan focusing on a number of aspects of both tax policy and tax administration, e.g. international Taxation; Tax Treaty Policy; transfer pricing; further advancement of revenue forecasting and tax gap analysis mechanisms, among other reforms. As part of the ongoing tax reform agenda of the country we believe it is essential to monitor and evaluate tax breaks and exemptions, and prepare a tax expenditures budget,” said Molineus.
He pointed out that it is important to systematically track information on the revenue foregone as a result of the various tax breaks.
“These tax breaks can be viewed as the equivalent of an expenditure program but provided through the Tax Code and, for this reason, are referred to as “tax expenditures”. A cost-benefit analysis of these tax incentives conducted on a regular basis would further inform policy makers on the need to continue, eliminate or modify these tax incentives. The Bank has recently commenced working with the Ministry of Taxes on these matters,” added Molineus.
Azerbaijan joined the World Bank Group in 1992. During this period, the bank allocated loans for the implementation of over 50 projects in the country worth over $3 billion. Seven more projects worth about $1.5 billion are being implemented.
Besides the loans, WB allocated 45 grants to Azerbaijan totaling $41.586 million in 1995-2014.
Follow the author on Twitter: @Lyaman_Zeyn