Tax Fraud of Oligarchs around Export of Gypsum

The production of gypsum and gypsum building materials in Azerbaijan is monopolized in the hands of oligarchs and susceptible to corruption. This is confirmed by the official statistics of Azerbaijan and neighboring Georgia.

The analysis carried out by Turan IA in 2014 on the basis of customs and statistics of Georgia and Azerbaijan found that exporters to evade tax deliberately understate export prices of gypsum about 10 times.

According to the State Customs Committee of Azerbaijan, in 2014 there was exported 157.8 thousand tons of gypsum, which is 22.7% more than in 2013. Declared total revenue amounted to $ 2 692.5 thousand, i.e. $ 825.1 thousand more than in the previous year. In 2014, the product was designed for local customs by $ 17 / ton, $ 3 more than in 2013.

All exports accounted for Georgia, the Statistical Office of which notes that in 2014 the imports of gypsum into this country were just as much as Azerbaijan exported (http://geostat.ge/cms/site_images/_files/english/bop/FTrade__2014_ENG .pdf).

However, the volume of imports of goods in value does not agree with the data of the customs authorities of Azerbaijan. Georgia confirms that it imported gypsum for $ 26 817.1 thousand, 15.6% more than in 2013. Georgian Customs designed a ton of Azerbaijani gypsum at $ 169.9, 10 times more than the Azerbaijani colleagues. Thus, in 2014 exporters hid $ 24.1 million of tax on export of gypsum. In the previous year, “plaster mafia” hid $ 21.5 million from tax.

Within two months of this year, imports of gypsum by Georgia totaled $ 3 million.

According to the State Statistics Committee of Azerbaijan, in 2014 there was produced 192.8 thousand tons of gypsum, which is 23.3% less than in the previous year. These data can cause serious mistrust, as manufacturers issued as commercial products only 114.5 thousand tons, and the remaining volume (78.3 thousand tons) was used for their own needs, in the construction sector as well as for the production of finished gypsum products - mainly drywall. In the two months of this year, the legal production of gypsum was 32.8 thousand tons (+ 10%).

Recall that the main producers of plaster in Azerbaijan are Garant Holding and Gilan Holding, which belong to the oligarchic families Mammadov and Heydarov. The companies of both holdings are located directly on the nearby gypsum deposits in the Goranboy region. Gilan Holding has a joint venture with the German company Knauf for the production of drywall. After the appearance of this company the imports of gypsum products into Azerbaijan were limited. ---08B