“Any bank in Azerbaijan can be closed without any reason, except for 4 local ones"

The deduction of expenses for food, housing, and representative costs from income has always been a topical issue from a taxation perspective, frequently discussed in relation to the extent of deductions allowed for workers' food and housing expenses and entrepreneurs' representative expenses.

This article examines public participation in budget management during the tenure of Samir Sharifov, who served as Azerbaijan's 5th Minister of Finance throughout a significant portion of the country's post-independence period. By analyzing his 19 years of service, we aim to assess his contributions and the Ministry's approach under his leadership.

Previously, the classification of a taxpayer as high-risk was conducted solely on the initiative of the tax authority without reference to any legislative act, which naturally led to taxpayers’ legitimate grievances. Later, based on the practical experience acquired by the tax authorities in this area, on July 28, 2020, the Cabinet of Ministers adopted the decision to approve the “Criteria for a High-Risk Taxpayer, Including Risky Transactions.”[1] However, this document did not meet expectations regarding the identification of truly high-risk taxpayers, as the criteria determined were too strict in certain respects and, from a practical standpoint, half-baked. In my opinion, a key shortcoming of the decision is evident if one considers its lack of a mechanism for removing a taxpayer from the “black list” of high-risk taxpayers.

The weakest aspect of the Tax Code of the Republic of Azerbaijan is its instability (volatility). The frequent changes in legislation (especially tax and customs regulations) are not only characteristic of the Tax Code but also of all normative legal acts in the country. This hinders taxpayers and entrepreneurs from implementing their plans for the future and negatively impacts the volume of domestic investments and the process of attracting foreign investments. Notably, taxpayers have repeatedly witnessed tax privileges and exemptions being granted without specified durations and subsequently revoked unexpectedly. Among the amendments to the Tax Code that will come into effect on January 1, 2025, there are provisions of this nature.