Duty-free regime for industrial parks to stimulate Azerbaijani economy
By Fatma Babayeva
The exemption of the industrial parks in Azerbaijan from customs duties and several taxes is expected to increase the profitability of these parks for its residents.
The recent decision on exempting the residents of the industrial estates from customs duties on imports for five years starting from May 1, 2016 will further stimulate the faster development of the non-oil sector of the country, economist Ogtay Hagverdiyev told Azernews in an interview on May 11.
The expert further elaborated that foreign investors mostly prefer to invest in oil sector of the country. However, the steps taken by the government to create favorable conditions for investors will likely increase their interest in the non-oil sector of the country as well.
In addition, the Azerbaijani government implements a program to increase share of the non-oil sector, and great works will be realized in these direction in coming 4-5 years, Hagverdiyev said, but not ruled out the possible increase in the number of the industrial parks in the country.
The decision to apply tax-free frames for residents of the industrial parks has been made as part of the amendments to the Law on Customs Tariffs that was adopted at the plenary session of the Milli Majlis (Azerbaijani parliament) on May 6.
The parliament adopted amendments to the Law on Social Insurance as well, exempting foreign residents of Azerbaijan's industrial parks from payment of compulsory social insurance for five years from May 1, 2016.
In addition, the residents of the industrial parks are exempt from income, land and property taxes for seven years.
Moreover, the equipment and technology used in the industrial parks are also free from the value added tax.
Today, Azerbaijan conducts works to create infrastructures and organize four industrial parks in Sumgait, Balakhany, Mingachevir and Garadagh.
Furthermore, the creation of the Neftchala Industrial Site is at its final stage.
Overall, there are 12 residents in total in the industrial parks of Azerbaijan. Seven out them are in Sumgait, four in Balakhany and one in Garadagh.
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Fatma Babayeva is AzerNews’ staff journalist, follow her on Twitter: @Fatma_Babayeva
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