Economists on new wages and taxes

Baku/05.01.22/Turan: By decree of Azerbaijani President Ilham Aliyev, the minimum wage in Azerbaijan has been raised to 345 manats from January 1, 2023. The minimum pension has been raised to 280 manats.

Economist Gubad Ibadoglu considers this increase insufficient, since the requirement of the European Social Charter provides for increase in the minimum wages in Azerbaijan to 500 manats per month. The Azerbaijani government promised to fulfill the requirements of the ESC, of which the Republic of Azerbaijan is a member," Ibadoglu said on Facebook.

"According to the commitment of the Republic of Azerbaijan to the European Union, the minimum wage in the country should not be less than 60 percent of the average salary. This means that the minimum wage should be at least 500 manats per month," the economist said.

The rise in the minimum wage will affect earnings of employees working in line with tariff payment.

Ibadoglu believes that it is more correct to determine minimum wages by hourly payment. Thus, hourly payment rates are accepted in the USA. From January 1, the hourly minimum wage in the country will be 1 manat 76 gapiks, and after deduction of taxes there will be 1.7 manats, that is, one dollar," the expert added.

Added to this can be that the increase in the minimum wage will rise the monthly payments of workers to the Social Security Fund and for Compulsory Medical Insurance.

Note that taxpayers registered in Baku will be required to transfer 86.25 manats per month to the Social Insurance Fund, and 13.8 manats per month for Compulsory Medical Insurance. In 2022, they transferred 75 and 12 manats, respectively. Those registered in Sumgayit will transfer 77.6 manats to the State Pension Fund instead of 67.5 manats, and 13.8 manats for Compulsory Medical Insurance.

Economist Samir Aliyev, who reported this on Facebook, pointed out that from January 1, Baku taxpayers, having earned 100 manats, will have to pay 5.5 manats  to the tax authorities.—0—