BAKU, Azerbaijan, April 15. Azerbaijan has outlined the main directions of its medium-term revenue policy, aimed at ensuring economic growth, expanding economic diversification, and making the investment environment more attractive, Trend reports, citing the MF.
Within this framework, the government plans to optimize the tax burden, support entrepreneurship, encourage investment in strategic sectors, improve tax and customs administration, and increase the use of environmentally friendly vehicles.
According to the Ministry of Finance, efforts will also continue to build transparent relationships between state revenue agencies and taxpayers, alongside measures to legalize business activities and income. These steps are expected to accelerate the formalization of economic activity currently concentrated in the shadow economy.
Taking these priorities into account, the main directions of revenue policy for 2027–2030 include:
1. Improving the business environment and promoting
investment
One of the key priorities is to create a more favorable and
predictable business environment, stimulate investment activity,
and optimize the tax burden on businesses. Plans include
simplifying tax administration, enhancing tax incentives that
encourage investment, and strengthening mechanisms that support the
development of the real sector.
2. Reviewing expiring tax exemptions and
incentives
A central focus will be reassessing the fiscal and economic
effectiveness of expiring tax benefits and exemptions. Ineffective
measures with limited impact on economic activity and the
investment climate may be eliminated or scaled back, while
necessary incentives in priority sectors will continue in a more
targeted and results-oriented manner.
3. Expanding the tax base and clarifying taxable
objects
To ensure sustainable tax revenues, the government aims to broaden
the tax base, more precisely define taxable items, and fully
mobilize tax potential. This includes improving the classification
of taxable activities, strengthening accounting of economic
transactions, and refining legal and administrative mechanisms that
support tax base expansion.
4. Simplifying tax debt deferral mechanisms and
introducing incentives
Efforts will focus on simplifying mechanisms for managing tax debt,
applying more flexible approaches for taxpayers, and strengthening
voluntary compliance. This includes improving procedures for
granting deferrals, offering more favorable terms to taxpayers
facing financial difficulties but continuing operations, and
considering relief on penalties and fines under certain
conditions.
5. Strengthening tax control mechanisms and
administration
Another priority is increasing the effectiveness of tax oversight
and modernizing administrative processes. Measures include
expanding risk-based control systems, enhancing digital solutions
and data exchange, tightening oversight of taxpayer reporting and
payment discipline, and making tax authorities more efficient and
results-oriented.
6. Improving taxation mechanisms for
non-residents
In response to growing cross-border economic activity, Azerbaijan
plans to improve taxation of non-residents earning income from
Azerbaijani sources. This includes clarifying tax rules for digital
services, e-commerce, and international service provision, aligning
mechanisms with global best practices, and strengthening safeguards
to protect the tax base.
7. Clarifying taxation of state budget
funds
The government also aims to establish clear and unified rules for
taxing funds allocated from the state budget. This involves
refining taxation approaches for subsidies, subventions, transfers,
grants, and other public funds, clearly defining tax obligations
for recipients, and eliminating legal uncertainties through
improvements to the regulatory framework.