Nakhchivan Not Going to Save Public Money

In 2016, the own revenues of the state budget of the Nakhchivan Autonomous Republic will be 69 million manat, not more than this year. The government of the exclave will receive about the same grants (282.35 million manat) as those of this year (297.7 million AZN) from the central budget of Azerbaijan.

The Accounts Chamber of the NAR does not publish the conclusion of projects and execution of the state budget of the autonomy, and independent NGOs are not allowed to the discussion and analysis of those documents. Therefore, it is not known what proportion of public funds becomes subject to corruption.

The Nakhchivan government receives annually about 250-300 million manat from the central budget in the form of direct government investment. The autonomy also receives several million AZN from the Reserve Fund of the President of Azerbaijan in the state budget. The republic also receives favorable international loans.

It is noteworthy that the generous and uncontrolled funding of Nakhchivan is arranged against the background of the fall in world oil prices and reduction of the state budget of Azerbaijan for 2016 by 1 billion 466 million manat (+8.3%). The total budget expenditure of Azerbaijan is set at 16 billion 264 million AZN and the revenue is set at 14 billion 566 million AZN.

According to the approved state budget of NAR, certain changes have been made in the structure of tax and customs revenues from local resources. But at the same time the total income has not changed. Due to the planned cuts in income from VAT by 3 million manat, the expected amount of income tax on individuals has increased: in 2016 the income tax paid by NAR residents will be 18,820,000 manat instead of the 14,870,000 manat.

The expected tax on corporate profits will be 1 million manat, 0.5 million manat less than in 2015.

Local sources said that almost the entire economy of the autonomy, with an annual GDP of about $ 3 billion (2014), is concentrated in the hands of the family of the head of the Supreme Majlis of the Nakhchivan Autonomous Republic, Vasif Talibov. His immediate family owns four holding groups (Gemigaya, Nagshicahan, Design and Cahan) and the commercial bank Nakhchivanbank.

Note that the state budget of the Nakhchivan Autonomous Republic is part of the consolidated budget of the Republic of Azerbaijan. The consolidated budget also includes the state budget of Azerbaijan, SOFAZ's budget and the State Social Protection Fund. ------08B