By Leman Mammadova
Revenues to the state budget for income tax from oil and gas companies operating in Azerbaijan under PSA (Production Sharing Agreement) contracts are projected at 750 million manats ($441 million) in 2020, which is 15.4 percent less than the forecast for 2019.
Thus, this figure amounted to 886 million manats ($521 million) in 2019, says the Ministry of Finance.
The ministry says that the forecast for 2020 is calculated from the average oil price at $55 per barrel, while for 2019, the base oil price is $60 per barrel.
In addition, following the results of the first eight months of 2019, the average price for Azeri Light brand oil amounted to $67.2 per barrel.
As for Azerbaijan’s State Oil Company SOCAR, the company’s tax payments to the state budget for 2020 will be at 1.4 billion manats ($0.82 billion), which corresponds to the figure for 2019. According to the Ministry, SOCAR will provide 6 percent of state budget revenues in 2020.
SOCAR paid taxes to the state budget at 741.326 million manats ($436.20 million) in the first half of 2019. The company paid taxes to the state budget in the amount of 1.6 billion manats ($0.94 billion).
The oil and gas companies operating in Azerbaijan under PSA contracts pay income tax four times a year: in January, April, July and October. Meanwhile, payments to the state budget for income tax are made from the actual price of oil on world markets.
So far, Azerbaijan has signed over 30 PSA contracts for the development of oil and gas fields. The oil and gas companies operating in Azerbaijan under PSA contracts in 2018 paid $1,016 billion ($597 million) to the state budget, which is 2.2 times higher than in 2017. The actual average oil price for Azerbaijani oil amounted to $73.1 per barrel in 2018 compared to $55.4 per barrel in 2017.
The government has also revised forecasts for GDP growth rates for 2020-2023. Finance Ministry notes that GDP growth will be 3 percent in 2020, 3.7 percent- in 2021, 3.1 percent- in 2022, and 3.2 percent in 2023, according to updated forecasts. Thus, the average annual GDP growth in 2020-2023 will amount to 3.25 percent.
At the same time, the growth of oil GDP will be 0.9 percent in 2020, 4.5 percent in 2021, 2.7 percent in 2022, and 1.9 percent in 2023. The non-oil GDP growth is projected at 3.8 percent in 2020, 3.4 percent -in 2021, 3.3 percent- in 2022, and 3.8 percent in 2023.
According to forecasts, the nominal GDP will be 83.3 billion manats ($49 billion) in 2020, 89 billion manats ($52.37 billion)- in 2021, 93.2 billion manats ($54.84 billion)- in 2022, and 97.7 billion manats ($57.49 billion) in 2023.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
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