Population to Lose, State Budget to Earn

In 2015, significantly reduced personal income, as well as legal persons employed in small and medium-sized businesses, the founder of the Center for Economic Research Dr. Gubad Ibadoglu told Turan.

According to him, as a result of legislative changes to the Tax Code after 6 years of the moratorium there will begin levying of income tax (10%) on dividends from bank deposits. The exceptions are contributions of up to 500 manat. Since the majority of investors (total 5.3 million deposits) has a much larger amounts on deposit accounts, this measure will provide a receipt to the state budget of 70 million manat (approximately $ 90 million), so the population will lose as much.

In addition, he drew attention to the change of levying property tax on individuals. "From now on, this tax will be charged not with the inventory value, but depending on the size of the apartment privately owned. That is, citizens will pay the same tax, regardless of the market value of their property. Property tax will be calculated for each square meter in excess of 30 square meters and differentiated by regions," said Ibadogolu.

The state, he said, is going to fill the budget at the expense of motorists: change the order of excise duties for imported cars. Consumer spending will increase by the amount of 100 ($ 127.5) to 13,300 ($ 16.5 thousand) AZN, depending on the engine size.

Among commodities, whose prices will rise as a result of increased excise taxes, are alcohol, vodka, spirits, liqueurs and liqueur products, brandy and cognac products, champagnes, beers, cigars, cigarettes and so on.

Due to the increase in excise duties it is expected to increase the price of platinum, gold jewelery, processed and polished diamonds. As a rule, prices for jewelry entail higher prices for other consumer goods, the expert said. "The growth of these taxes and excise inevitably entail rising costs of family budgets, reduced income and directly affect the well-being of the population. This, of course, create difficulties in the implementation of the declared objectives of the Central Bank of Azerbaijan to preserve the two-three-percent inflation," said Ibadoglu.

CBA although declares and promises to preserve the stability of the manat, the fate of the national currency will depend on the timing and magnitude of the fall in world oil prices, the expert believes. In his view, in long-term maintenance of low oil prices and the increasing value of the dollar it will be impossible to maintain the stability of the manat. "The depreciation of the ruble and cheaper crude oil have a negative impact on the purchasing power of the population of Azerbaijan", said Ibadoglu.

According to him, the financial and economic crisis in Russia and the steady depreciation of the ruble reduces the attractiveness of the Russian Federation for Azerbaijani exporters. On the other hand, revenues of Azerbaijanis working in Russia and their remittances to their homeland fall, too. --17D-