Weekly economic review (April 2-6)

Analysis Materials 9 April 2018 17:47 (UTC +04:00)

Center for development of crypto-currency & blockchain market appears in Azerbaijan

A center for study and development of the market for crypto-currency and blockchain technology has been created in Azerbaijan, Chairman of the Azerbaijan Internet Forum (AIF) Osman Gunduz told Trend.

Recently, a meeting of interested parties was held, where the center was established and main directions of its future activities were defined, he said.

"A plan of the center's activities was drafted, which covers educational activities, preparation of proposals on regulation of the crypto-currency and blockchain technology market, and provision of consulting services in this sphere. As part of the creation of the center, the blockchain.az website, which will be put into operation within the next week, was registered. In the meantime, it is planned to conduct free training courses on crypto-currencies and blockchain technology for media representatives, so that information on this industry is delivered competently," Gunduz said.

The future plans of the center, according to Gunduz, include attracting foreign experts to this field and developing proposals for companies and banks on the use of blockchain technologies and preparation for initial coin offerings (ICOs).

Gunduz previously said the experience of neighboring countries that have made some progress in this area and have the appropriate infrastructure and ecosystem should also be studied.

Azerbaijani Central Bank’s currency reserves exceed $ 5.5B

The currency reserves of the Central Bank of Azerbaijan (CBA) amounted to $5,508 billion in March 2018, which is by $1,075 billion (24.3 percent) more than in the same period last year, according to statistical data posted on the CBA website April 3.

During the month, CBA reserves rose by $120.7 million.

Currency reserves of CBA increased by $1.36 billion or 34.2 percent in 2017 as compared to 2016.

CBA's currency reserves started to decrease in July 2014. The reduction was at a slower pace (within a range of $20 million to $50 million) at the beginning, but a sharp decline began in December 2014 due to an increase in demand for US dollars in the country.

During 2016, the CBA currency reserves increased by 0.9 percent in March, 1.35 percent in April, 3.97 percent in May, 0.7 percent in August, and 0.14 percent in November.

Azerbaijani Taxes Ministry to work out package of amendments to tax legislation

The Azerbaijani Ministry of Taxes will submit a package of amendments to the Tax Code for the government's discussion till early May 2018, Azerbaijani Deputy Minister of Taxes Sahib Alakbarov told reporters in Baku April 3.

"We received proposals on amendments to tax legislation from entrepreneurs until March 31," he said. "We are currently reviewing these proposals. For this purpose, a special commission has been set up which holds meetings daily."

"Until early May, we must submit a package of amendments to the Tax Code for it to be discussed simultaneously with the budget package," Alakbarov said. "As you know, the process is rather long and it is not easy. First, the package of proposals must be agreed on in the Ministry of Taxes, discussed in the Cabinet of Ministers and then submitted to the presidential administration. Therefore, we want to complete our part of the work till May."

Touching upon the issues raised as a result of the entrepreneurs' proposals, Alakbarov added that the proposals mainly relate to non-cash payments, documents required by this or that operation, changes in tax legislation and administration.

"A big number of taxpayers want administration to be simplified and we are working in this direction," Alakbarov said. "Every proposal will be reviewed. We are thoroughly reviewing these proposals and will continue to do that."

Earlier, Azerbaijani Minister of Taxes Mikayil Jabbarov said that the package of amendments to the Tax Code will help solve key problems in tax administration which entrepreneurs are facing.

"This package will be submitted for the government's consideration within the 2019 state budget formation process," the minister said. "Special attention will be paid to a decrease in the share of the shadow economy and stimulation of the transition to the legal economy. We intend to ensure this transformation for it to be favorable for entrepreneurs."

Role of cash in modern money sector discussed in Baku

The 7th international conference entitled "Cash payment, collection and cash operations in the bank" kicked off with the support of the Central Bank of Azerbaijan (CBA) in Baku on April 3.

The two-day event is aimed at exchanging views and experiences on the use of innovations in these areas, searching for joint business ideas and creating opportunities to form new business ties.

At the conference it is planned to discuss such topics as role of cash circulation in the modern money sector, use of new technologies and concepts in cash management, improvement of money protection systems and fight against counterfeiting.

Representatives of the central banks of the CIS countries and other countries, financial organizations, as well as members of companies providing various equipment and services for banks, leading analysts of the cash sector and international experts take part in the conference.

The main organizer of the conference is the Ukrainian-Estonian joint company "Business Format". Over the past years, the conference was held in Ukraine, Belarus and Kazakhstan.

Method on insurance of mortgage loans can be changed in Azerbaijan

The Azerbaijani Mortgage and Credit Guarantee Fund plans to independently insure mortgage loans, the Azerbaijan Insurers Association (AIA) told Trend on April 4.

The Fund proposes to amend the law "On Mortgage" in this regard, AIA said.

"Presently, in accordance with the legislation, insurance of mortgage loans is carried out by the country's insurance companies, However, the Fund plans to create a special pool, through which the loan insurance will be carried out," AIA said.

But, according to AIA, the insurance companies do not completely agree with this.

"The insurance companies are concerned over this step. The mortgage loan is issued for a long enough period, and the risks are increasing every year. Therefore, in 10, 15 or 20 years, the Mortgage Fund may lack the means to cover risks," AIA said.

Following the discussions between the Fund and AIA, the parties agreed to take into account the views of the insurance companies when drafting proposals to amend the legislation, AIA said.

Azerbaijan to lure private investments to wind plants construction

Azerbaijan's State Agency for Alternative and Renewable Energy Sources will present documents to the Cabinet of Ministers in order to attract private investments in the construction of wind power plants in the country, the Agency's Deputy Head Jamil Malikov told Trend.

"As part of the strategic roadmap for the development of public services by 2020, wind power plants with a capacity of 350 megawatts should be built in Azerbaijan. Today it is necessary to solve the issue under which conditions and in which forms we will be able to attract private investments, both local and foreign," he noted.

Malikov said that the necessary documents should be prepared and submitted to the government in order to start attracting investments by 2020 and start the construction.

"The government should adopt legislative and regulatory documents that will create conditions for attracting investments in this sphere, making it attractive for investors. They, in particular, cover tariffs and guarantee contracts for the supply of electricity," he added.

Azerbaijan to lower insurance rates on mortgage loans

Azerbaijani insurance companies will lower the insurance rates on mortgage loans, the Azerbaijan Insurers Association (AIA) said in a message April 4.

The agreement to lower insurance rates on mortgage loans was reached as part of the meeting of AIA Chairman Mustafa Abbasbayli with the leadership of the Azerbaijan Mortgage and Credit Guarantee Fund.

"As part of the next meetings, concrete measures to be undertaken in connection with the agreement will be discussed," the message said.

Presently, there are no uniform tariffs regarding mortgage credit insurance in Azerbaijan. Tariffs are formed by insurance companies on an individual basis and depend on risks.

Insurance companies collected premiums worth 1,900 manats on credit insurance for the first two months of 2018, according to Azerbaijan's Financial Market Supervisory Authority. No payments were made for the reporting period.

Customs revenues of Azerbaijani budget increase

Azerbaijan's State Customs Committee transferred 726.99 million manats to the state budget in January-March 2018, which is 27.3 percent more than in January-March 2017, reads the Committee's report issued on April 5.

Revenues from customs duties amounted to 281.24 million manats, revenues from value added tax (VAT) - 189.76 million manats, revenues from excise duty - 14.24 million manats, and revenues from highway-use tax - 2.82 million manats in March 2018.

Revenues from the customs duties increased by 35.2 percent, revenues from VAT - by 36.1 percent, revenues from the excise tax - by 2.83 percent and revenues from the highway-use tax - by 4.7 percent in March 2018 as compared to March 2017.

The forecast on customs revenues of Azerbaijan's state budget was 2.43 billion manats for 2018.