Modernization of system and expansion of electronic services in tax administration of Azerbaijan

Analysis Materials 18 July 2011 14:49 (UTC +04:00)

In order to improve tax administration, modernize and expand the use of e-services from 1 July 2011, the Taxes Ministry for the first time passed shifted to the registration of individuals in real time (on-line).

Due to the simplicity and convenience of this system, just for seven days, the Ministry registered 75 individuals and 26 commercial banks join the system. The introduction of the system reduced the number of documents by five times. The system has simplified the process of registration of individuals dealing with entrepreneurial activities, and reduced the day of registration from two days to 2 minutes. Moreover, these measures allow to minimize the contacts of the taxpayers with the tax authorities.

According to an order by the Azerbaijani President Ilham Aliyev dated May 23, 2011, since July 1, the Taxes Ministry of Azerbaijan started on-line registration of individuals engaged in entrepreneurial activities without establishing a legal entity. The use of e-registration is an important project of the Taxes Ministry and a new stage in tax payments. On-line form of payment of taxes is now made by over 100,000 people. On-line registration of taxpayers covers 46 percent of the entire process. Thanks to the on-line registration, now the physical entities shall be registered in the tax service through individual identification number, and for this, it is enough to appeal via the Internet. There is no restriction in this case.

Under the current law, any citizen of Azerbaijan, who has received an identity card, that is, who reached 18 years old, can get registered in on-line regime. The e-service system of the Taxes Ministry can not only carry out reception of on-line documents, but also provides confirmation of acceptance. In parallel with the modernization of the e-services of the tax authorities, it is expected to realize on-line registration of businesses and legal entities, which is technically more difficult than dealing with business registration of individuals, and requires some time to prepare for the introduction of these services.

It should be noted that the system of on-line registration of physical and legal entities is only a small part of large-scale work carried out by the Taxes Ministry to introduce information and communication services. The Ministry has approved a large-scale action plan that incorporates the necessary measures to establish online payment system and its improvement in 2011-2012, expanding the range of e-services, installation of new terminals by December 2011, etc. These measures are carried out within the State E-government Program in Azerbaijan and presidential order on some measures in the field of provision of e-services by public authorities. And the State E-government Program itself is only part of the reforms in the field of information communications. The explanation for this is the Action Plan for 2011-2015 on realization of State Program for Poverty Reduction and Sustainable Development for 2008-2015 approved by the President of Azerbaijan Ilham Aliyev, which contains a list of measures aimed at improving legislation, increasing employment and strengthening social protection, improving education and health, implementing monitoring systems in the field of unemployment and employment, etc.

One of the main directions of the Action Plan is to create a centralized electronic information system in the country for the introduction of "e-government", which envisages coordinating the efforts of government agencies to implement e-services system, eliminating bureaucratic procedures, simplifying the process of citizens and businesses' appeal to government agencies.

In order to facilitate providing public services and expanding the range of information and communication component, the Taxes Ministry shifted to the system of registration of business via the "single window" principle from Jan.1, 2008. As a result, the registration process has accelerated so much that in 2008-2010 and 5 months in 2011, a total of 155,498 legal and physical entities engaged in entrepreneurial activity passed registration via the "single window" principle.

Another example of successful use of all benefits of information and communication technologies by the Taxes Ministry should be considered the fact the Multimedia Centre for the fourth time gave the status of "best online resource of the year in the country" to the website of the Ministry. Monitoring of this NGO included analysis of websites of 60 state agencies and 15 municipalities upon 67 parameters, including the level of social importance and transparency of information.

It is interesting that the official website of the Ministry has been functioning since 2002 in Azerbaijani, Russian and English. And since last year, the Ministry also launched Video Guides service in three languages, which made it even more accessible and attractive. So, if last year about two million users visited the website, in five months of 2011 the figure was 1.3 million. In order to implement the order by the President Ilham Aliyev on some measures in the field of provision of e-services by public authorities, the Taxes Ministry adopted a plan of necessary measures to create e-payment system and its improvement in 2011-2012, expanding the range of services provided by tax terminals, including the range of e-services, installation of new terminals by December 2011, the preparation of proposals to amend the legislation to use of "e-audit" in 2011-2012. The plan also envisages studying the international experience in tax control over electronic commerce and preparation of proposals in this sphere in 2011-2012. Action plan also calls for integration with the certification center, providing electronic signature, and the process will begin within two months after the start of the electronic signature. In August 2011 it will be possible to conduct tax operations, using e-signatures. And in December of this year is expected to create opportunities for online payments through the Internet portal of the Ministry.