Azernews.Az

By Amina Nazarli

The Azerbaijani Parliament approved a number of important documents at its regular plenary session on December 16.

The Parliament adopted a draft state budget for 2017, under which revenues of the state budget are forecasted at 16.255 billion manats ($9.11 billion).

The upper ceiling of the budget deficit is expected at the level of 645 million manats ($361 million) or 1.05 percent of the GDP in 2017.

Main sources of deficit coverage are revenues from privatization, internal and external loans, foreign grants and the remainder on the single treasury account of the state budget as of January 1, 2017.

Income of the state budget will be formed by revenues from the Ministry of Taxes (7.51 billion manats), the State Customs Committee (2.2 billion manats), the State Committee on Property Issues (8 million manats), paid services of government-financed organizations (353 million manats), transfers of the State oil Fund of Azerbaijan (6.1 billion manats) and other sources.

In 2017, expenditures of the state budget will be distributed as follows: defense (2.8 billion manats), science (118.5 million manats), education (1,733.4 million manats), healthcare (745.4 million manats), social protection and social security (2,053.1 million manats) and others.

Revenues of the consolidated budget are forecasted at the level of 20.02 billion manats, expenditures at 21.267 billion manats. Being an integral part of the consolidated budget, revenues of the State Social Protection Fund under the Ministry of Labor and Social Protection of Population are predicted at 3.4 billion manats, revenues of Nakhchivan Autonomous Republic at 348.4 million manats, State Oil Fund at 8,370.6 million manats.

Deficit of the consolidated budget is forecasted at the level of about 1.247 billion manats.

Oil prices were set at a price of $40 per barrel in the state budget for 2017.

Finance Minister Samir Sharifov said that spending on culture envisaged in the state budget of Azerbaijan for 2017, will be increased by 3 million manats ($1.68 milion).

The minister also said that the cost for maintaining of the Parliament will increase by 850,000 manats ($476,000).

Spending on culture, art, information, physical training and the spheres not included in other categories, have been planned at the level of 282.575 million in 2017, including 120.79 million manat in the arts and culture spending.

Tax amendments

The parliament also approved amendments to the Tax Code, which provides for exempting the sale of poultry, production and sale of flour and bread from value added tax (VAT) for three years starting from January 1, 2017.

The import and sale of wheat is also exempt from VAT (rate in Azerbaijan is 18 percent) for three years.

The import and sale of wheat, production and sale of flour and bread have already been exempt from VAT in Azerbaijan since January 2016. However, the term of these benefits expires in late 2016.

Furthermore, starting January 1, 2017 sale of "toxic" assets of insolvent banks and non-bank credit organizations (NBCO) for three years is exempt from value added tax (VAT) provided in the Tax Code.

In the original version of the bill changes affect only banks, but after discussions in the relevant parliamentary committees, it was decided to cover the bankrupt NBCO.

In 2016, Azerbaijan withdrew the licenses of 10 banks including Bank Standard, Zaminbank, Dekabank, Kredobank, Caucasian Development Bank, Atrabank, Bank of Azerbaijan, Gandjabank, Texnikabank and Parabank. As the main reasons for their closure, the regulator indicated non-compliance with regulations and control loss of ability to pay.

In general, changes made in the tax laws aimed to reduce the volume of cash payments, attraction of e-commerce taxation, reduce the tax burden, simplify tax administration, expand the rights of taxpayers and other issues. The amendments provide for making 201 changes in Tax Code, including 115 new articles.

Social expenditure increases

The Parliament also passed the 2017 budget of the State Social Protection Fund (SSPF) of the Ministry of Labor and Social Protection of Population.

In accordance with the budget, revenues and expenditures are projected at 3.4 billion manats ($1.9 million) in 2017, which is 100 million manats more than in 2016. This growth is mainly due to increase of social insurance charges.

Minister of Labor and Social Protection of Population Salim Muslumov said earlier that the social payments to the country’s population will amount to 3.318 million manats in 2017, which exceeds the social payments forecast for 2016 by 234 million manats, or 7.6 percent.

“The cost of maintenance of the central office and local bodies of Azerbaijan’s State Social Protection Fund will amount to 40 million manats, thus demonstrating a rise by 48.2-percent,” Muslumov added. “The growth of expenditures on the maintenance of the Fund is related to the expansion of its scope of activity, restructuring and increase of staff.”

Muslumov went on to add that the Social Protection Fund’s revenues in 2017 will increase by 270 million manats or by 8.6 percent compared to the figure expected for 2016.

“Some 62.5 percent or 2.125 billion manats in the Fund’s revenues in 2017 will account for deductions for mandatory state social insurance,” Muslumov said.

Bills approved

The draft law "On Martial Law" was also approved at the plenary session on Friday.

Speaking about the bill during the debate, the first vice-speaker of the parliament Ziyafat Asgarov noted that the ongoing Armenian provocations on the contact line and the tension necessitates strengthening information security.

He said that spread of information containing military secrets in some cases, as well as attempts of the enemy to cross the front line indicated the need for greater information security, he said.

The parliament also approved two agreements, one "On the simplification of visa regime between Azerbaijan and the Swiss Federal Council" and the second "On readmission of illegally residing persons between the Government of Azerbaijan and the Swiss Federal Council".

Both agreements were signed at a meeting between Swiss Foreign Minister Didier Burkhalter and Foreign Minister of Azerbaijan Elmar Mammadyarov, as part of his official visit to Switzerland on October 10.

The law provides for visa-free entry of citizens of the two countries holding diplomatic and service passports.

--

Amina Nazarli is AzerNews’ staff journalist, follow her on Twitter: @amina_nazarli

Follow us on Twitter @AzerNewsAz