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Azerbaijan Holds National Tax Forum

by Tatiana Smolenska,, Moscow

11 February 2014

Azerbaijan's Ministry of Taxes is seeking to strengthen the country's tax system with a view to creating a more business-friendly environment, Tax Minister Fazil Mammadov said.

Speaking at the third national tax forum, which took place over February 6-7 and was entitled "Azerbaijani tax system: realities and prospects," Mr Mammadov outlined the tax ministry's plans.

In 2014 Azerbaijan plans to establish tax-free technology parks to drive innovation, "which will play a major role in the formation of new spheres of the national economy," the minister said. Individuals and entities doing business in these parks will be exempt from taxes for seven years, and organizations managing and operating the parks will enjoy unlimited tax exemptions.

Mr Mammadov also noted that the ministry aims to increase tax surveillance. To that end it implemented a pilot project for an electronic audit mechanism last year. "The work on regulation of transfer prices and surveillance mechanisms in the sphere of electronic trade will be continued."

Deputy Economy and Industry Minister Sevinj Hasanova, also speaking at the event, noted that Azerbaijan's tax exemptions for agriculture, dividends on the bank deposits of individuals and securities, banks' income and insurance and re-insurance companies have proved effective. As a result the country will continue to prioritize the use of tax benefits until 2020, despite recommendations from international financial institutions to reduce or abolish them.

Tax benefits and privileges in Azerbaijan are equal to 30 percent of total tax revenues in the state budget, which is expected to be AZN7.1bn in 2014, Akif Musayev, adviser to the tax minister, said.

Mammadov noted at the forum that Azerbaijan's tax system has undergone intense modernization over the last ten years. "Widespread use of information technology allowed us to simplify tax administration and significantly reduce the costs," he said. He added that "We want to create such a system that taxpayers could perform their obligations to the state from a distance, not visiting tax agencies. At the moment, the ministry offers more than 50 electronic services to taxpayers."

TAGS: individuals | environment | tax | business | insurance | budget | audit | Azerbaijan | dividends | regulation | trade | free trade zone | services | Economy | Tax

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