Structural Reforms in Ministry of Taxes Not to Help Bring Largest Taxpayers to Reason

The Ministry of Taxes intends to have the debt repaid in full. In this connection, by order of the head of the Ministry, Fazil Mammadov, structural changes have been arranged.

According to the information, there is a new structure - the General Department of Analysis of Criminal Tax Offenses and Organization of Work for the Collection of Tax Arrears (the head is Vidadi Mammadov). Another new structure is designed to coordinate relations with foreign tax authorities, banks, insurance companies and financial institutions in order to exchange specific data. Rather, its staff will analyze the entrepreneurial activity of local businessmen abroad and make them pay their taxes. The Office for Mandatory Collection of Tax Debts has also been created, as well as a number of other departments.

These are cosmetic measures, experts say, because they do not affect the largest taxpayers headed by SOCAR, whose total debt amounts to about 5 billion manats. The problem is that these debtors are not private traders, but government monopolies, and the tax inspectorate has no authority to collect taxes from them in full, satisfied with the voluntary listing. Moreover, the closed and open joint stock companies annually borrow loans from foreign financial institutions under state guarantees and the government pays debts for them.

In addition, according to experts, there is one more practical drawback - the budget law is adopted for one year - from January 1 to December 31, after which the debts of the referred monopolies are written off and in February-March the country's President issues an order to allocate 200-300 million manats to each of them to cover the costs. This practice creates conditions for blatant corruption and embezzlement of budgetary funds. --17D-