BAKU, Azerbaijan, January 31. To fully maximize Azerbaijan's capacity for cargo transit via road transport, it needs to raise its fleet of necessary vehicles three to five times compared to the current one, head of the Association of Transport and Forwarding Companies of Azerbaijan (AAFC) Kamran Habibov told Trend.
"Given Azerbaijan's good geographical location and transit prospects, its freight transportation fleet should be extended three to five times. The goal can be met by providing appealing circumstances for local trucking companies and foreign investment in the road transport industry. This firm must be lucrative, and then it will grow rapidly," he emphasized.
According to Habibov, there are numerous intricacies, mostly in the fiscal area, that necessitate rapid remedies that will increase Azerbaijan's transit role as a hub as well as its trade.
At the same time, the association's leader feels it is critical to "bring" "cheap money" to Azerbaijan.
"It is preferable to approach the question of hubs not only from the perspective of cargo transit but also trade. We need purposeful judgments regarding tax concerns, infrastructure development, machine parks, and trade hubs in Azerbaijan, i.e., a set of measures.
Road carriers must be confident when traveling long distances to carry freight to European and Central Asian countries. For this, they require modern trucks that operate on Euro-5 or higher fuel. Such work requires the state to provide appealing conditions. There should be an agreement that ancient automobiles (20 or more years of operation) cannot enter Europe, and in Azerbaijan, sadly, such vehicles make up a considerable share of the fleet," Habibov said.
He mentioned that, according to various estimates, there are about 10,000–12,000 cars registered in the country involved in international flights.
"Figures on vehicles working in international road transportation do not reflect the essence. Many cargo carriers prefer to work unofficially in the "gray zone" due to complicated taxation. Our association, which accepts only companies with "clean business" into its ranks, has long been discussing with the tax authorities that the process of earning money would be convenient for trucking companies, but there are still many unresolved issues that lead to loss of revenue for the state," Habibov said.
In the opinion of the head of the association, the successful development of this sphere of services could be facilitated by the temporary attraction of this business to simplified taxation.
"It is necessary to let business get out of the "gray zone," to learn to count and pay taxes according to a simple scheme, and then switch to taxation from profit, that is, to act from simple to complex. I understand that the tax service considers it necessary to attract everyone to taxation for profit. Such taxation is right. However, at one time, they introduced a moratorium on tax audits to allow the business to develop and to teach it how to calculate taxes correctly. Such a moratorium for the automobile business would help it to "spin up," "get on its feet," and increase the degree of trust in the state," Habibov stated.
According to Habibov, the current situation in the sphere of forwarding companies in the country is unsatisfactory.
"About 200–300 companies are calling themselves logistics companies in Azerbaijan. However, many of them have no concept of logistics. The current lack of clear rules in this business allows anyone to open an LLC and engage in cargo transportation without having any idea of the risks this LLC carries for themselves, cargo owners, or the state. Essentially, these companies are engaged in reselling other people's services without understanding their responsibility or risks," he stressed.
He also pointed out that there is no liability insurance for road haulers and freight forwarding activities in the country.
"In European states, besides the fact that these activities are regulated by a license, there are some other requirements leveling the risks. For example, the authorized capital of 25,000 euros, compulsory insurance of forwarding activities, etc.," Habibov noted.
According to the head of the AAFC, it is urgently necessary to adopt legislation in this area, harmonizing it with international law norms, adopting an economic activity code, maintaining correct statistics, introducing mandatory insurance for this type of activity, and coordinating tax and customs authorities.
"All of these steps will greatly diminish the share of gray business in the field of road freight transportation," Habibov concluded.
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