Simplified Tax to Complicate

The government is seeking resources to cover the costs associated with the fall in oil prices. In the autumn session the parliament may consider the proposal of the Cabinet of Ministers of Azerbaijan on raising the rate of simplified tax for entrepreneurs in trade and catering.

Changes are proposed in the framework of the draft amendments to the Tax Code. Today, this rate varies depending on the accommodation - for the residents of Baku, it is 4% of turnover, regardless of employment, and for the provincials it is 2%. Amendments to Article 220 of the Tax Code suggest differentiation not by the place of residence, but by occupation, i.e. merchants, in the case of the document’s entry into force, will be paying 6%, and representatives of public catering - 8%.

According to Turan’s experts, it is unfair for the representatives of the periphery, where the turnover is several times less than in the capital. This will lead to further artificially low turnover, which already is very common throughout the country. Under the current law, the simplified tax is valid for the owners of the individual identification code of taxpayers, whose annual turnover is up to 120 thousand manats. Practice shows that even large stores with daily revenues of thousands of AZN present figures, which do not correspond to reality, to the inspection bodies. --17D-