Azerbaijan ranks 2nd for smallest number of taxes

By: Aynur Karimova

Azerbaijan ranks second among the Central Asian and Eastern European countries for the smallest number of taxes, according to a joint report of the World Bank and the auditing company PwC “.

The Paying Taxes-2016 report indicates that Azerbaijan has seven types of taxes, and for this indicator, the country shares the second place with Belarus, Kazakhstan, Macedonia and Russia. Leadership in the region for this indicator belongs to Georgia and Ukraine – five types of taxes.

Azerbaijan also ranks eighth in the region for the least time required for payment of taxes (195 hours).

The authors of the report point out that the tax burden in Azerbaijan (39.8 percent) is more than the average in Central Asia and Eastern Europe (35.2 percent), but less than in the world (40.8 percent).

In general, Azerbaijan took the 34th place in the ranking of Paying Taxes-2016.

“The increase of productiveness of the non-oil sector and the increase of tax revenues from this sector are among the main challenges for Azerbaijan,” the report reads, recommending that Azerbaijan needs to increase tax revenues at a maximum level from the oil sector, “but it may require serious and institutional reforms”.

The future reforms should be focused on broadening the tax base and increasing transparency and trust in the taxes field, which, in turn, will allow increasing the fees, according to the authors of the report.

“These changes will support the government in the development of a sustainable source of income,” the World Bank and PwC experts say.

Paying Taxes report is developed by the World Bank and the PwC in the past ten years.

Azerbaijan’s tax system has passed a thorough process of modernization since technological base of the tax system was established. The system has a wide range of technical capabilities. Today, the country’s tax system offers taxpayers most of tax services used in the most advanced countries.

The country is in the list of 12 leading countries in terms of the successful use of an electronic registration system of taxpayers, according to the World Bank.

The Taxes Ministry provides Azerbaijani population with 59 types of electronic services, which is the widest range of e-services delivered by state agencies.

As a result of implemented measures, over the past 15 years the volume of taxes and other revenues of the state budget have increased 14 times, the revenue from non-oil sector, 14.4 times, and the proceeds from the regions, 14.8 times.

The state budget revenues in the amount of 7.12 billion manats or 36.6 percent of total revenues are forecasted in Azerbaijan through the Ministry of Taxes in 2015. Some 4.81 billion manats or 67.7 percent will account for the revenues from the non-oil sector.

The revenues from the oil sector are projected at 2.3 billion manats with 32.3 percent of tax revenues. Thus, 33 percent of a total volume of tax fees will account for the value added tax, income tax – 31 percent, income tax proceeds – 13.8 percent, excise taxes – 8 percent, other taxes – 14.2 percent.

SOURCE: AZER NEWS

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