The elimination of the shadow economy in Azerbaijan will be one of the priorities that will receive special attention this year. Mikayil Jabbarov, the Minister of Taxes said this in the framework of the forum held in Baku on the topic “Taxes, Transparency and Development”. According to him, in 2019 the Ministry of Taxes plans further development of the tax audit system, including through the use of modern technologies. The minister noted that this will significantly improve transparency in the private sector.
“The priority objectives in the tax policy for 2019 remain unchanged - the fight against the shadow economy. Thus, following the results of 2018, large wholesale enterprises of the country revealed facts of understating turnover totaling 930 million manat, in network markets - by 122 million manat, in private medical institutions - by more than 230 million manat. In general, in 2019, the Ministry of Taxes intends to continue work on improving transparency and improving relations between business and tax authorities,” minister said.
According to Mikayil Jabbarov, in the current year work will also continue on the integration of modern technologies into the work of the ministry. This will significantly improve the quality and speed of tax accounting of business objects. The Minister noted that over the past years, entrepreneurs have been given enough time to bring the accounting system in compliance with the legislation.
“Last year, the number of tax audits in Azerbaijan decreased significantly. This is reflected in the on-site inspections of active taxpayers. In 2018, out of every thousand active taxpayers, on-site inspections were carried out at four. This is only 0.4 percent. In turn, there are no medium business objects left in the country that have not been subject to tax audits,” minister added.
In turn, Minister of Economy Shahin Mustafayev noted that the elimination of the shadow economy will also affect business development. A mechanism to encourage investment has contributed to a significant increase in private investment in the non-oil sector of the country.
“The investment promotion mechanism applied since 2016 makes a significant contribution to the growth of private investment in the non-oil sector. The Ministry of Economy of Azerbaijan has so far issued investment promotion documents on 345 investment projects. The total investment in these projects is estimated at 3 billion manat. As part of these projects, it is planned to open 22 thousand jobs. In general, as a result of targeted and consistent measures implemented, in 2018 the share of the private sector in total production reached 84 percent,” Shahin Mustafayev said.
The forum also noted that the development of the private sector is of a strategic nature and characterizes a new era of entrepreneurship development in the country. Thus, according to the instructions of the President of Azerbaijan Ilham Aliyev, inspections in the field of entrepreneurship were suspended until 2021, the number of licensed types of entrepreneurial activities was reduced, procedures were simplified and duties to obtain them were significantly reduced. In addition, fundamental reforms have been initiated in the tax, customs and social spheres.