Gubad Ibadoglu: "From Next Year, It Would Be Possible to Apply Defense Tax"

In the next year, defense spending will be the lowest in the last 10 years and the way out of this would be the use of the defense tax, says the economist Gubad Ibadoglu.

On his profile on Facebook the economist wrote that the defense budget can be considered as the weakest part of the state budget for 2017.

"According to the draft state budget 2017, defense spending will be reduced in comparison with the year 2016 by 613.4 million manats (27.5%) and amount to 1 billion 615 million AZN (according to the current dollar exchange rate, $ 1 billion)," said Ibadoglu.

The expert noted that against the background of rising tensions in the region, and the confrontation with Armenia, Azerbaijan’s reduction in defense spending is a concern.

"At the same time it should be noted that the rising prices, the sharp devaluation of the manat adversely affect the conditions of military life. However, increase in the ability of the defense, as well as the renovation of the armed forces increases demand for currency.

In order to prevent a sharp decline in defense spending and to prevent wage cuts in the troops a defense tax could be applied from next year," stressed Ibadoglu.

The economist believes this type of tax could be attributed to the wage fund (1-2%) and the collected amount could be redirected to the Ministry of Defense so that the Ministry, in turn, was able to balance the expenditures and revenues.

"This tax is applied in many countries, living in conditions of war under different names, such as the military, the army, and the defense tax," Ibadoglu wrote.   -----71B