The main directions of Azerbaijan’s revenue policy for 2027-2030 have been announced.
elchi reports that this was noted in the Medium-term budget framework for 2027-2030 prepared by the Ministry of Finance.
It was stated that the main directions of the revenue policy include the following:
1. Improvement of the business environment and promotion of investments: One of the main priorities in tax policy is the formation of a more favorable and predictable business environment, the promotion of investment activity, and the optimization of the tax burden on business entities. In this context, it is planned to simplify tax administration, improve tax instruments that promote investment, and strengthen mechanisms that support the development of the real sector.
2. Review of expiring tax concessions and exemptions: One of the main directions of tax policy is to re-evaluate the fiscal and economic efficiency of expiring tax concessions and exemptions and to determine the expediency of their application. In this context, it is planned to abolish or limit the scope of concessions and exemptions whose effectiveness is not sufficiently justified and which have a limited impact on economic activity and the investment environment, while continuing to apply necessary concessions in priority areas on a more targeted and results-oriented basis.
3. Expansion of the tax base and clarification of objects of taxation: From the perspective of ensuring the sustainability of tax revenues, one of the main directions is the expansion of the tax base, more precise determination of objects of taxation, and full mobilization of tax potential. In this context, it is planned to specify objects of taxation across various fields of activity, ensure more complete accounting of economic transactions, and improve regulatory and administrative mechanisms that serve to expand the tax base.
4. Simplification of the deferral mechanism for tax debts and application of incentives: In the field of tax debt management, one of the main directions is the simplification of debt regulation mechanisms, the application of more flexible approaches for taxpayers, and the strengthening of voluntary payment discipline. In this context, it is planned to improve procedures for granting deferrals on tax debts, determine more favorable mechanisms for taxpayers experiencing payment difficulties but continuing their economic activities, and consider the possibility of applying concessions on financial sanctions and interest under certain conditions.
5. Strengthening tax control mechanisms and improving administration: One of the important directions of tax policy is increasing the effectiveness of tax control, improving administration mechanisms based on modern approaches, and raising the level of voluntary compliance. In this context, it is planned to expand risk-based control mechanisms, increase digital solutions and data exchange capabilities, strengthen control over taxpayers’ accounting, reporting, and payment discipline, as well as organize the administrative activities of tax authorities in a more flexible and results-oriented manner.
6. Improvement of the mechanism for taxing non-residents: In the context of modern economic relations and the expansion of cross-border transactions, one of the main directions is the organization of taxation of non-residents on Azerbaijan-sourced income based on more effective mechanisms and the improvement of the legal framework in this area. In this context, it is planned to clarify taxation rules for digital services, e-commerce, international service provision, and other cross-border transactions, improve taxation mechanisms taking into account international practice, and strengthen approaches that serve to protect the tax base.
7. Clarification of the taxation mechanism for funds allocated from the state budget: From the perspective of public finance management, one of the main directions is the regulation of the taxation mechanism for funds allocated from the state budget on a unified and clear basis. In this context, it is planned to clarify taxation approaches for subsidies, subventions, transfers, grants, and other budget funds, more clearly define tax obligations for entities receiving state funds, and improve the regulatory framework to eliminate existing legal uncertainty in this area.