TODAY.AZ / Business

Baku Reporting Center: Tax benefits to be valid for next few years

23 April 2020 [17:23] - TODAY.AZ

By Trend

The state support for the entrepreneurs during a pandemic can be rendered in Azerbaijan in two ways, Director of Baku Reporting Center Mehdi Babayev told Trend on April 23.

“Tax benefits will cover even the next few years,” the director added.

“One of these ways is rendering assistance to the entrepreneurs, and this process is already being completed. This includes the issuance of part of the salaries, lump-sum assistance,” Babayev said. “The second way is the reduction of the obligations of entrepreneurs to the state, including tax, social and other payments. These obligations will cover the post-pandemic period for an entrepreneur to continue the activity.”

“On the other hand, amendments to the Tax Code and the Law on Social Insurance have already been prepared,” the director said. “These amendments will cover three spheres. The first sphere is tax exemption, the second sphere - tax benefits, and the third sphere - tax holidays, that is, deferrals for entrepreneurs in connection with tax payments. The assistance will be rendered in 2021, 2022 and even the next few years. The proposed amendments mainly cover the post-pandemic period.”

Babayev also commented on the issue of full tax exemption.

“These concessions are envisaged for those entrepreneurs who have been greatly affected by the pandemic,” the director said.

“These entrepreneurs are exempted from property tax and land tax in 2020,” the director said. “Moreover, it is planned to reduce the income tax for such entrepreneurs by 75 percent in 2020. This will be a powerful impetus for the continuation of the entrepreneurial activity.”

“Moreover, there are also such taxpayers for whom 50-percent-privileges are envisaged,” Babayev added. “The entrepreneurs must understand that all these benefits and exemptions apply only to those who have been greatly affected by the pandemic. An 8-percent-tax rate was applied for entrepreneurs operating in the field of public catering, such as restaurants, cafes and wedding houses. It is planned to reduce this figure to four."

“The privileges are also envisaged for the entrepreneurs operating in the field of passenger transportation,” the director said. "The tax rates which are paid by these people for the number of passengers are also reduced.”

“However, there are benefits that are envisaged for all micro-entrepreneurs regardless of whether they suffered from a pandemic or not,” Babayev added. “If the simplified tax payments for such entrepreneurs previously were equal to two percent, presently, it is proposed to reduce this figure to one percent.”

“Moreover, 50-percent-benefits are envisaged in connection with the social insurance payments,” the director said. “For example, if a hairdresser in any district, along with paying a certain monthly tax, also paid the amount worth 62.5 manat [$36.8] as a social insurance contribution, this amount has been already reduced to 15 manat [$8].”

Babayev also touched on tax incentives for entrepreneurs.

“The conditions will be created for such people to pay tax liabilities for April a little later, in the following months,” the director said.

"For example, there is a current form of payment on income tax and property tax,” Babayev said. “The concessions will be made this year for entrepreneurs to pay taxes not quarterly, but at the end of the year. Besides the tax benefits, tax holidays are also envisaged. During this period, the entrepreneurs’ tax reports will not be required.”

“That is, in general, this can be called a tax reduction, as well as the opportunity to pay reduced taxes later,” the director added. “This is an extremely important step to continue the activity of entrepreneurs. There are even such taxes that have been deferred until 2026. This mainly refers to the micro-entrepreneurs."

(1 USD = 1.7 AZN on April 23)

URL: http://www.today.az/news/business/193192.html

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