Azerbaijan to reduce social insurance premiums for individual entrepreneurs
By Ofeliya Afandiyeva
The Azerbaijani Economy Ministry plans to provide discounts on social insurance contributions to individual entrepreneurs until January 1, 2021, local media reported on April 22.
According to the project published by the ministry, the compulsory state social insurance premium will be calculated from April 1, 2020 to January 1, 2021 for entrepreneurial activity – 25 percent of the minimum monthly wage in construction and trade, and 15 percent in other areas. At the same time, differential coefficients will be used depending on the regions.
Presently, the rates for social insurance contributions are 50 percent and 25 percent, respectively.
Persons engaged in trade in Baku currently pay $73.6 in social insurance. After the changes come into force, they will allocate $36.8 in social insurance, which is 50 percent less.
Moreover, persons engaged in other activities (except construction and trade) in Baku currently pay $36.8 in social insurance. Under the new conditions, they will allocate $22.1 for social insurance, which means a 40 percent reduction.
Compulsory state social insurance premium for each family member of individuals using agricultural lands owned by them, depending on the area of the land, the minimum monthly wage is calculated at the following rates:
Up to 5 hectares - in the amount of 2 percent ($2.9); From 5 to 10 hectares - in the amount of 6 percent ($8.8 per person); More than 10 hectares - in the amount of 10 percent ($14.7 per person).
At present, the social insurance premium for this category of the population is 6 percent of the minimum wage for each able-bodied family member.
The Law on Social Insurance was adopted in 1997.
Based on this social insurance is a form of security intended for compensation of lost right to work, profits, and also extra expenses of individuals.
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