Azernews.Az

By Nigar Orujova

Incomes from taxes on real estate have risen by 6.5 percent in the first half of 2015 compared with January-June 2014.

This statement was made at a workshop on “Property tax: innovations and solutions to problems” by Kamran Bayramov, the head of the department on work with regional administration and local government at the Azerbaijani Presidential Administration

“The growth in revenues can be traced to many regions and cities of Azerbaijan. For example, revenues from property tax in Ganja grew by 88.9 percent, in Jalilabad by 99.3 percent, in Shamkir by 1.5 times, in Shirvan by 2.5 times, and in Gadabay by 15, 5 times,” said Bayramov.

He went on to add that until the end of the year, Azerbaijan expects even more growth in property income tax revenues.

In general, growth can be observed in the majority of tax revenues, he noted.

“We conducted a statistical comparison of the activities of municipalities. I want to note that in comparison with the first half of last year, this year we can observe an increase in revenue for the majority of taxes. The decline is observed as well. For instance, the income tax on the ground decreased by 16.6 percent, the tax on mineral wealth by 55.8 percent. At the same time, tax revenues from advertising increased by two percent, tax on retail facilities and catering facilities by one percent, although previously we did not have any revenues from these sectors. Also, tax revenues from hotels, resorts and spas increased by 16.3 percent,” he said.

Bayramov noted that the main responsibility in raising awareness of the population on the issue of taxes rests with the municipalities.

“Municipalities need to mobilize all resources to collect taxes. An effective work should be carried out with population. The experience of those municipalities that have achieved success in this matter should be used. We need to instill a culture of payment of local taxes in the population,” said the head of department.

Bayramov said that extensive work on improving the technical base of municipalities has been carried out in recent years.

“If previously, 80 percent of municipalities did not even have a computer, now 90-95 percent of local government are provided with computers, and the rest will be provided by them in the shortest possible time,” he added.

Another positive fact, according to the head of the department, is that income from the sale of land by municipalities has decreased.

“Proceeds from the sale of land under the management of municipalities decreased by more than 50 percent. This is a positive fact, because municipalities should focus not on the sale of land but other tax revenues,” he said.

Since January 2015, individual property tax in Azerbaijan has been paid depending on the area of the privately owned building,.

Previously, the tax was levied at the rate of inventory value of the building.

In accordance with the amendments to the Tax Code, approved last year, property tax is calculated for each square meter area exceeding 30 square meters.

However, the Chairman of the Parliamentary Committee on Regional Issues, Arif Ragimzade, believes taxes levied on real property in Azerbaijan is very low.

“If we consider that there are 1.9 million households in Azerbaijan, and more than a million apartments in the cities, the tax levied for this real estate is very little. A one household is charged with 2.5 manats,” he said at the workshop.

He went on to add that funds attracted by municipalities in Azerbaijan in from real estate taxes are very low. This share of the budget of municipalities is about 10 percent.

Ragimzade noted difficulties in the collection of taxes in this area. “One reason is that not all households are registered. For some people it is profitable, they do not want to receive the documents. In this sense, the municipalities bear a great responsibility. It is very difficult to convince the public of the need to pay taxes. Voters must see where the money collected is spent,” said Ragimzade.

He said people should be active in the payment of local taxes, since it is in their best interest.

“One of the disadvantages is the fact that we are hearing from the state government. The apartments are owned by the population. Most do not want to pay taxes for the property. After some time, in connection with the repair of these buildings, new taxes will be applied. The state should not repair these buildings. People should understand they need to protect their property,” said Ragimzade.

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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar

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