Azerbaijan, Baku, Nov 25 / Trend I. Khalilova/
The Tax Ministry of Azerbaijan thinks it is inexpedient to decrease income tax rate or change monthly taxable income limit, Fazil Mammadov, Tax Minister, told the Parliament yesterday during the discussion of the draft state budget for 2012 and three following years.
Monthly income of a physical person is taxed at 14 per cent, if the monthly taxable income does not exceed 2,000 manat. If the income exceeds 2000 manat, 280 manat plus 30 percent of the sum exceeding 2,000 manat shall be paid.
The maximum income tax on employees fell from 35 percent to 30 percent, and for physical persons engaged in entrepreneurial activity with no legal entity established - from 35 percent to 20 percent from the January 1, 2010.
"The economic authorities believe that the taxation of income to 2.000 manat at the rate of 14 percent is considered as normal, because it concerns most of the population, the Minister said. If only bankers pay 30 per cent of the salary exceeding 2.000 AZN this will not affect negatively the wealth of the entire population," he said.
That's international practice, and Azerbaijan proceeds from it, he noted.
The official exchange rate on Nov 25 is 0.7865 AZN / USD.