Azerbaijan gains better position in DB-2015 report via effective reforms
By Aynur Jafarova
Azerbaijan's better position among the top 10 countries in terms of the greatest number of reforms carried out in the country is the result of measures conducted in the country's Industry Year, in particular Azerbaijani President Ilham Aliyev's decree on adopting additional measures to develop entrepreneurship and instructions to accelerate the reforms in this regard.
This remark was made by Chairman of the Center for Economic and Social Development, Vugar Bayramov on October 30.
"This presidential decree envisages sharp decrease of the number and time of several procedures on the entrepreneurship activity. The decree, with a main goal to minimize the unreasonable interference in the business activity, has set some concrete tasks to improve the business environment," he told AzerNews.
According to the annual ranking of Doing Business-2015 prepared by the World Bank and the International Finance Corporation and released on October 29, Azerbaijan has improved its position by 8 points compared to last year's ranking and entered the list of top 20 countries in terms of preparing the ground for starting a business.
The report also said Azerbaijan has made the process of starting a business easier by reducing the time to obtain an electronic signature for online registration of the tax accounting.
According to the report, Azerbaijan is among the top 10 countries in terms of the greatest number of reforms carried out in the country. The country has implemented reforms in the fields of starting business, registration of property and payment of taxes.
Compared with last year's results, Azerbaijan achieved the greatest success on such subheadings as the payment of taxes (33rd versus 77th a year ago), dealing with construction permits (150th against 180th) and connection to the electricity system (159th against 181st).
Also, Azerbaijan was ranked 12th for easiness of establishing an enterprise business in the country. The number of procedures required for registration of the business is equal to 3 and the number of days to 5.
"Azerbaijan's indicator is better than the average indicator of member states of the Organization of Economic Cooperation and Development. The relevant indicators [the number of procedures and days for registration] of this organization, comprising developed countries, are 5 and 9, while for the regional countries are 5 and 12, respectively," Bayramov added.
Azerbaijan has improved its position for obtaining construction permits by 17 points and stood at the 150th place in Doing Business-2015 report.
"This is because of the decrease of the number of days [required for obtaining the relevant permit for construction]. According to the report, some 151 days are required for this purpose and this indicator is almost the same with the average indicator of OECD countries," he noted.
Azerbaijan also leaves behind the OECD and regional countries for registration of ownership standing at the 10th place for this indicator.
"Only 3 procedures is required in Azerbaijan for passing the registration of ownership, while this figure is equal to 5.4 in the regional countries and 4.7 in OECD countries. The number of required days is 8.5 in Azerbaijan. The country leaves behind the regional and OECD countries in term of this indicator. It is 23.1 in the regional countries and 24 in OECD countries," Bayramov stressed.
Azerbaijan's position for contract enforcement (31st place), tax payment (33rd), protection of investors' rights (51st), insolvency settlement (94th), lending (104th), connection to the power supply system (159th), and international trade (166th) are considered as satisfactory.
The report also said Azerbaijan has simplified the transfer of immovable property to the ownership by introducing an electronic system for help on charge. In addition, the country has simplified payment of taxes for companies by introducing an electronic system of registration and payment of social insurance contributions.
In general, Azerbaijan is ranked 80th in the Doing Business-2015 report.
Azerbaijan's all macroeconomic indicators favor the profitability of doing business in the country. In recent years, the non-oil industry in Azerbaijan has developed rapidly. GDP has increased by 16 times over the past 20 years. Meanwhile, the average salary of the nation has increased by twenty-fold over the last 20 years.
The business activities are very successful in the country due to the growth of incomes of population. The taxation of business in Azerbaijan enjoys more favorable conditions than in Europe. The highest income tax rate of the country is below twice the European average. Also, all legislative and practical conditions have already been created for the development of business in Azerbaijan.
As a result of the implementation of various reforms on regulations and the improvement of legislation in the area of improving the business climate, Azerbaijan's economy has improved its position in the world's leading economic reports and now it is among the advanced countries.
Thus, Azerbaijan was able to improve and strengthen its position in one of the leading reports across the globe. This can be considered as one of the key factors showing the effectiveness of the reforms carried out in the country.