Unreasonable Tax Penalties Become More Frequent

Baku/21.07.17/Turan:Entrepreneurs are increasingly complaining about unreasonable tax sanctions and fines. Speaking about the reasons for the oppressive scope of financial sanctions, economists note that tax revenues have turned into a life-saving circle for the state budget, since oil revenues have declined. Apparently, it is impossible to patch holes in the budget at the expense of taxpayers, staying within the law.

The situation, connected with the increased pressure of tax officials on business, as well as the frequent facts of unjustified tax penalties and fines, was explained by the economist Akram Hasanov in an interview with Turan IA.

- Many entrepreneurs note that tax officials resort to unjustified fines, and complaints of this nature have recently increased. As a rule, business owners say this in private conversation, preferring not to bring the case to trial. What caused this situation?

- In many respects, the circumstances are explained by the fact that the Ministry of Taxes has a great deal of workload. Simply put, this department should now raise funds and replenish the state budget, as oil revenues have declined. At a high level, we are told that the oil era is over. But we then understand that the state apparatus needs to live on something, the officials should be funded, salaries should be provided, public needs should be provided, etc. But easy oil money does not come in the amount that was before, so the Ministry of Taxes has to make efforts.

Since business is a key source of tax revenue, it is entrepreneurs who have come to the forefront of tax authorities" attention, including that they have been subject to unlawful penalties. In the context of declining income, individuals are also taken into account, wages are reduced, etc., but private entrepreneurship, naturally, remains the most attractive and generous source.

- Agree that here there is a question of absence of counteraction of the suffered party...

- We must admit that we are witnessing a two-edged problem, where errors exist on both sides. Let's start with entrepreneurs. It's no secret that business in our country violates laws, hiding revenues and evading taxes. There are many reasons to speak about, but the fact remains. Naturally, when such cases are identified during tax inspections and tax officials fine them, it is correct, since there is a reason for that. But there is another side to the question - recently, tax officials write off money from bank accounts of entrepreneurs, because they only need to send an appropriate order to the bank, and the bank writes off money from the company"s bank account. The companies then have to fight with the tax authority in order to return the money unreasonably withdrawn. Recently, such cases occur often enough, and trials on such cases can last for years. In the case of litigation, which many entrepreneurs do not prefer, there is a problem with the tax authority. I hope it is not a trend yet, but the fact remains.

- What caused the mass character of the phenomenon?

- The fact is that the Ministry of Taxes has set plans for its territorial divisions and those, trying to fulfill and exceed the plan, do everything hastily. They unreasonably write off money, exact fines, etc. Incidentally, this fact explains the staff shuffling in the Ministry of Taxes. Employees leave at their own volition, unable to fulfill their plans, or they are fired. In no other government department is there such a constant shuffling of personnel. I have repeatedly heard that the cause of withdrawal is a difficult choice - to behave dishonorably to business or to leave.

- In your opinion, does the country"s leadership know about this situation, or do we deal with independent activity of individual employees?

- It should be noted here that the Ministry of Taxes is one of the rare state agencies that have organized an effective management system. On the other hand, I do not think the leadership can initiate such illegal phenomena. In this regard, the Ministry of Taxes has achieved a clear system of internal checks, but you cannot get through to everyone. Naturally, when they find out, they fire, but they can find out in a few years, because the courts last for years. Besides, not all businessmen submit lawsuits - there is such a point.

And, most importantly, it's no secret that previously entrepreneurs had the opportunity to negotiate and understate the amount of tax. Last months, such cases have come to naught, as the ministry struggles with it, but there are businessmen got used to this practice. Over the past year, the State Customs Committee has followed the Ministry of Taxes, abandoning the unlawful schemes. At the same time, many traders have a problem, because earlier they did not declare part of the imported goods. And when a trader wants to sell part of the goods left from that time (and they were not all sold), he is fined by the tax agency. It's all to blame - the trader involved in the unlawful schemes and the former customs practice. In general, it is the fault of the state, because of which business suffers.

In view of the foregoing, it is noteworthy that the budget revenues announced by the Finance Ministry in the first quarter of this year caused optimism at the officials when amending the budget: according to official figures, they amounted to 3.591 billion manat versus the forecast of 3.473 billion manat, which means exceeding of the forecast by 3.4%. In particular, revenues from the Ministry of Taxes amounted to more than 40% of the total funds, or 1.42 billion manat, and those from the State Customs Committee - 571 million manat (17.5% more than forecast). It is for this reason that it is planned to increase the revenues through these bodies responsible for replenishment of the national piggy bank (the Tax Ministry - by 135 million manat, and the State Customs Committee - by 50 million manat) by a few more positions.