Amnesty of capital and property in Azerbaijan

Baku / 04.04.20 / Turan: Representatives of the private sector and the banking sector have petitioned to consider an important tool in the process of reducing and eliminating the shadow economy - the amnesty of capital and property. The Minister of Economy Mikayil Jabbarov said this at a meeting with President of Azerbaijan Ilham Aliyev. “We intend to pursue a policy aimed at replacing oil and gas revenues. Especially with the organizations of entrepreneurs, the topic of the shadow economy was also discussed. We will present proposals on the amnesty of capital and property in a general package (support for business and citizens - ed.) to your attention, the minister noted.

Lawyer Akram Hasanov in an interview with Turan noted that he supports the state’s initiative from an amnesty of capital and property, which he proposed to go back to during the financial crisis in connection with the processes around the International Bank of Azerbaijan in 2015. “It all depends on which model of amnesty the government chooses. Various forms were practiced in the world, depending on the list of amnesty property and income and their location, the timing of the amnesty. In Azerbaijan, the period of legalization of income and property should be at least two years,” the expert said.

In his opinion, the amnesty of capital and property in the conditions of Azerbaijan should be applied by adopting the Constitutional Law. This is important for entrepreneurs to have constitutional guarantees for the irrevocability of this step. In addition, citizens should be given the right to appeal local court decisions on disputes of this amnesty in an international court. The essence of this proposal is that any laws can be adopted in Azerbaijan, but sometimes the conditions change during the “game”, and local courts interpret them at their own discretion, Hasanov emphasized.

“I believe that under an amnesty of capital and property, the state will tax them even with a symbolic lump sum tax, for example, 10% of the amount of legalized funds. This is logical in the current conditions, when the state may experience financial difficulties. ”

An amnesty of capital and property can lead to the return of capital taken out of the country in various ways. When legalizing these incomes, the state can apply two methods: a letter of guarantee on the legal origin of income with a condition of up to 30% of a one-time tax on the amount of declared income and full repatriation of income with a condition of paying a one-time tax of not more than 5%, Akram Hasanov believes.

The economist Rovshan Agayev, commenting on the effect of the government’s plan on the amnesty of capital and property, on the example of Russia, said “everything is not so simple. “In the Russian Federation, the financial effect of the amnesty of capital and property was much lower than the expectations of the government. In Azerbaijan, not every entrepreneur legalizes capital exported outside the country and has trusted the law. There must be political, legal and judicial trust,” he emphasized. --08B--