Azernews.Az

By Gulgiz Dadashova

The total volume of tax debts in Azerbaijan hits 2.4 billion manats or $1.5 billion as of January 2016.

Deputy Taxes Minister Sahib Alakbarov announced about this on the sidelines of the Taxes Forum in Baku on February 10, adding that for several years the size of the debt vary within these limits.

Currently, 70 percent of taxpayers make tax payments on a voluntary basis, he said adding that the tax debt can be seen in every area, and about half of them are in the public sector.

Reminding that the ministry takes measures to reduce the tax debt, he said almost 30 percent of the tax deductions that the ministry transfers to the state budget fell to tax arrears.

Alakbarov further said that despite sharp decline in energy prices, Azerbaijan's GDP in 2015 grew by more than one percent, while the non-oil sector grew by 8.4 percent.

“In 2015, the country’s economy received nearly $20 billion of investment, half of which are foreign ones,” he said.

The deputy minister noted that the government works on the implementation of its tasks, improvement of existing business environment for entrepreneurship development, protection of the population from negative effects of the global crisis.

“In order for this strategy to be a long-lasting one, it is necessary to increase the income of the state budget, and, of course, entrepreneurs and businessmen will have to do a serious job regarding that,” Alakbarov said. “They must fully comply with tax obligations in a timely manner, keep accounting well and mustn’t evade taxes.”

He further noted that the economic reforms carried out in the regions of Azerbaijan with a view to improve the efficiency of tax administration measures tax revenues from the region over the past five years have increased about twice, reaching 622.1 million manats.

Addressing the event, WB Baku office head Larisa Leshchenko said the Bank will continue to be a reliable partner of Azerbaijan in assisting the country in economic diversification in conditions of global instability.

Leshchenko said that the development of non-oil sector is especially important, given the fact that it’s not worth waiting for increase in oil prices in the near future.

She noted that in previous years Azerbaijan took serious steps to ensure stability of the economy.
“Even with oil prices at $60 per barrel in the first half of 2015, Azerbaijan achieved significant economic growth of 5.7 percent, and in the second half of 2015, despite an even further fall in oil prices, the country was able to ensure GDP growth, though at a slower pace,” Leshchenko added.

She said that the difficulties caused by low oil prices are at the same time good opportunity to hold serious reforms and strengthen economic resilience.

Leshchenko welcomed the steps taken by Azerbaijan to improve the tax system, noting the application of simplified tax for companies with a turnover of capital of up to 200,000 manats.

She said that this will seriously affect the development of non-oil sector of the country’s economy.

Talking to reporters on the sidelines of the event, Leshchenko said the Bank does not consider that the lowering of Azerbaijan’s sovereign rating by international rating agencies could have a negative impact on attracting additional investment to the country.

“Of course, this could have a certain negative effect, if the government wants to issue Eurobonds, but private investors consider a variety of factors and a rating fall is only one of them. For example, they take into account the business climate in the country, how much they can make money, whether they can take capital out of the country, etc.,” she explained.

She emphasized that the manat devaluation had a positive impact in this regard, because it allowed making Azerbaijan's economy more competitive.