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Minister calls appeal of businesses for VAT exemption groundless

11 May 2016 12:34 (UTC+04:00)
Minister calls appeal of businesses for VAT exemption groundless

By Nigar Abbasova

The Taxes Ministry called on entrepreneurs not to evade from tax payment.

"Some entrepreneurs in Azerbaijan continue to evade taxes," Taxes Minister Fazil Mammadov told journalists.

He noted that it is happening in many spheres, specifically adding that tax evasion is observed in supermarket chains and in selling alcoholic beverages. “Tax authorities are still conducting systematic inspections despite the fact that their number has sharply reduced,” minister said.

Minister also commented on the issue of VAT exemption for supermarkets. He mentioned that the appeal of a number of supermarket chains such as (Bizim Market, FRESCO, SEBET, Makromart, ARAZ, Neptun, Bolmart) with the request of VAT exemption for essential goods produced in the country particularly meat, fish, dairy foods, baked goods, eggs, rice, fruit and vegetables, and baby food is groundless. “There is no use in the exemption of supermarkets from VAT. About 98 percent of the agricultural output is in the farmer markets and only the remaining part is in supermarkets. Therefore, the issue is not the matter of discussion,” minister said.

In their appeal heads of supermarket chains noted that after switching to floating rate of manat on December 21, 2015 it became hard to maintain staff and business profitability without price raising.

Mammadov said that the Ministry of Taxes plans to start using the clearing system for the majority of goods in the future. "Currently, it applies only to alcoholic beverages, but in the future, we plan to expand the list of goods and services, the payment for which will be carried out in a non-cash form," he added.

Chairman of the State Committee for Standardization, Metrology and Patent Ramiz Gasanov also commented on abuse of government confidence by some entrepreneurs. “Entrepreneurs presume upon the suspension of inspections and produce poor quality products,” he said. “Entrepreneurs should have a correct impression of inspection. Large scale inspections are suspended but we are still responsible for revealing and eliminating existing problems.

Inspections over entrepreneurial activity have been suspended since November 1, 2015. The Taxes Ministry also temporarily suspended field tax inspection and measures aimed at day-to-day monitoring of entrepreneurial entities with the annual turnover less than 120,000 manats and payers of simplified taxes. Exceptions are provided for inspections related to the conclusion of employment treaties, defining of turnover and control over the use of documentary stamps in the sale of excisable goods.

As many as 70,000 taxpayers are expected not to undergo inspection. President Ilham Aliyev approved the list of inspections allowed should they endanger lives or health of individuals, the security of a state or economic interests in accordance with the law on Suspension of inspections in the entrepreneurial industry.

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