Azerbaijan adopts state budget for 2016
By Nigar Orujova
Azerbaijan cut budget expenditures for 2016. The Parliament adopted the state budget for the next year at a plenary meeting on October 20.
State budget expenditures, as compared to this year, will fall by 22.9 percent, and compared to 2014, they will decline by 13.07 percent, Finance Minister Samir Sharifov said at the meeting. Budget indicators were formed taking into account an oil price of $50 per barrel and the national currency rate of 1.05 manat/$1.
The minister said that revenues of Azerbaijan’s state budget for 2016 are expected to reach 14.566 billion manat ($13.9015 billion), or 25.2 percent of GDP, while the expenditures will reach 16.264 billion manat ($15.5220 billion) or (28.2 percent).
Consolidated budget expenditures in the new budget will total 19.957 billion manat ($19.0466 billion), while the revenues are forecasted to exceed 16.720 billion manat ($15.9572 billion), he added.
The 2016 budget deficit is expected to stand at 1,698 million manat ($1,620.54 million), or 2.9 percent of GDP, which is set at 57.7 billion manat ($55.0678 billion).
In comparison with the expected indicator for 2015, budget revenues will decline by 25.1 percent, and compared to the actual indicator of 2014, they will fall by 20.84 percent.
The Finance Minister also said that during the discussions on budget forecasts, the allocation of additional funds was proposed for resolving problems facing IDPs and refugees.
Expenditures for this purpose have been increased by 50 percent to 150 million manat ($143 million), said the minister.
Sharifov noted that the additional expenditures would be ensured with the transfers from the Azerbaijan State Oil Fund.
The parliamentary session also approved the ‘Law on the 2016 Budget of the State Social Protection Fund’ and amendments to the ‘Law on State Duty.’
The meeting also saw the adoption of draft amendments and additions to the Tax Code.
Raising of the upper limit of privileged income will allow more than 500,000 people to increase their monthly income by 3-9 percent, Sharifov said.
The draft amendments and additions to the Tax Code stated that the monthly income of an individual, which is subject to income tax after deducting exemptions, increased from 250 ($239) to 2,500 manat ($2,386).
If today income tax was charged from a salary under 250 manat (after the deduction of non-taxable portion of 140 manat which is the subsistence minimum for the able-bodied population), the scope of the privileged income will be expanded. That is, a greater number of people will use this preference.
In accordance with the amendments, salaries under 2,500 manat will be taxed at 14 percent only after deductions of a non-taxable portion of 136 manat, which is the amount of a living wage in the country for 2016.
The changes include the expansion of the benefits’ coverage for income tax and the exemption of satellites and other spacecraft from paying property tax.
The amendment stated that in 2016, the benefits of participants of sports totalizators in the country will be subject to income tax, individuals and legal entities dealing with residential construction will only pay the simplified tax. Moreover, new simplified tax rates for trade and public catering area will be introduced, and penalties for violations of the rules managing cash calculations will be strengthened.
The changes grant the Ministry powers to apply to the courts to restrict tax debtors from leaving abroad.
At the same time, the Ministry will be able to use these powers against Azerbaijani citizens, foreigners and stateless persons.
The parliament also adopted draft amendments to the Migration Code and the Code of Civil Procedure. Due to these amendments, if the taxpayer has paid off the tax debt, his right to leave the country will be restored within two business days.
In addition, the parliament ratified an agreement between the governments of Azerbaijan and the U.S. on “Improving compliance of Azerbaijan and the U.S. of international rules on tax requirements and fulfilling the requirements of the Foreign Account Tax Compliance Act.”
The agreement signed this September defines the criteria under which the accounts of individuals and entities can become subject to inspection under the FATCA.
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Nigar Orujova is AzerNews’s staff journalist, follow her on Twitter: @o_nigar
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