By Azernews

By Amina Nazarli

Azerbaijan’s Taxes Ministry plans to change principles of its work with taxpayers, said Minister Fazil Mammadov as he addressed a conference “Together towards transparency” in Baku on March 10.

The sixth annual tax concession, organized jointly with the American Chamber of Commerce in Azerbaijan (AmCham), brought together about 300 representatives of private and state bodies.

“We want to apply the principles of individual approach to taxpayers. We have two main areas to work on: the first, as I said, an individual approach to taxpayers, and the second - establishment of partnership [with taxpayers]," the minister said.

Certain changes, including prolongation of the period of “tax holiday”, exemption of certain products from VAT, introduction of simplified tax for representatives of show business and etc, were made to the Tax Code of the country in 2016. In tote, some 201 amendments and 115 new articles were made to the document.

The changes are expected to reduce the volume of cash payments, ensure attraction of e-commerce taxation, reduce the tax burden, simplify tax administration, and expand the rights of taxpayers and other issues.

Speaking at the conference Natig Shirinov, Head of the Department for Risk Analysis and Control at the Ministry, said that a Coordination and Management Department has been created at the Taxes Ministry.

“The department’s main function is effective coordination of activities among other departments and ministry’s local bodies in the context of making amendments to legislation and administration,” Shirinov said.

Mastercard Manager on Azerbaijan Alper Meric, in turn, spoke about the measures to be taken  regarding non-cash payments.

He said that international payment system MasterCard will prepare an action plan to reduce the share of cash payments in favor of non-cash payments in Azerbaijan.

MasterCard has recently launched a joint project with the Central Bank of Azerbaijan to reduce the share of cash payments, Meric recalled.

"The Central Bank expects three effects from the implementation of this project: expansion of non-cash payments in the country, increasing transparency in the economy and support of economic growth," he said.

Meric noted that currently MasterCard is assessing the volume of cash turnover in the economy of Azerbaijan, especially in the non-oil sector.

"Studies are being conducted in Baku and eight other regions of the country. We will try to find out why cash payments are used and to what extent. We will then prepare an action plan to reduce the volume of cash payments in the economy and determine the necessary infrastructure that will allow to switch from cash payments to non-cash," he said.

In turn, Mammadov proposed MasterCard to revise the commission for its services on card transactions in the country.

"In regions we apply a two-percent [simplified tax] rate and you also charge a similar amount for your services. If to consider bank commission on card transactions, sometimes this amount exceeds the tax rate. You [MasterCard] ask us to undertake measures to increase turnover by non-cash payments, and we ask to revise tariffs to stimulate the growth of non-cash payments," the minister said.

As of January 2017, the number of payment cards in Azerbaijan is 5,343 million, of which only 629,000 are credit cards, according to the Central Bank of Azerbaijan, 

The total number of transactions carried out in January 2017 with debit and credit cards hit 6,467 million, while the volume is 928,000 manats.

The total number of non-cash payments inside the country – via ATMs hit 109,000 (the volume is 28,000 manats) and via the POS terminals 1,117 million (the volume is 57,000 manats).