Next year it is planned to apply tax benefits to the income of microentrepreneurs in Azerbaijan. The Ministry of Finance told the press that the main directions to be implemented in the field of income in 2025 are aimed at accelerating the country’s economic development, strengthening competitiveness and making the investment environment more attractive.
I wonder what tax benefits can be applied in this area, what measures need to be taken?
“Caspian” newspaper article on the subject.
Tax expert Mahmud Abasguliyev said in statements to “Kaspi” that, according to the corresponding article of the Tax Code, 75 percent of income paid to the state budget as a microbusiness entity by people who have three employees, who do not have mandatory debt of the State Social Security, and whose turnover does not exceed 200,000, is exempt from taxes and pays 20 percent of the rest. “In other words, those who currently have three employees receive a 75 percent discount. In addition, in the latest amendments to the Tax Code, to ensure the continuity of the activities of microentrepreneurs and offset the burden of social security at the expense of the state budget, 25 percent of the social insurance premiums they pay will be charged to the state budget. The problem here is that the annual turnover is 200,000. It would be better to increase this figure in the future.
Deputy Vugar Bayramov considers the granting of concessions to microentrepreneurs to be one of the important points: “There were concessions on the income of microentrepreneurs. A 75 percent discount on income tax was applied for business volumes up to 200,000 manats. That is, microentrepreneurs Entrepreneurs paid 5 percent of their income, but in 2024, from January 1, the system changed Only microentrepreneurs with 3 or more employees have the opportunity to use these benefits, for example. What those who operate as microentrepreneurs, but do not have employees, could not benefit from said benefits, from this point of view the benefits will be restored for microentrepreneurs who receive income within a certain limit and will receive a 75 percent discount on the income. income tax, as in previous years.
The parliamentarian emphasizes that during the debates in the Milli Majlis proposals were presented in this regard: “Our expectations are that from January 1, 2025, micro-entrepreneurs with a certain turnover within the limited turnover will again have the opportunity to get a discount and a 75 percent discount will be applied to their income.
Economist Fikret Yusifov claims that more than 90% of the country’s business entities are microenterprises. According to him, in recent years the State has taken a series of measures to develop microentrepreneurship and, even during the pandemic, a 75% tax discount has been set for 2022/2023 in order to support microentrepreneurship. : “As of January 1 of this year, this discount was eliminated and microentrepreneurs began to pay taxes as before. Calculations show that the additional funds obtained by the state budget from the cancellation of these benefits could not exceed 50 million manats, instead of the tax increase from 5% to 20%, i.e. 75 The cancellation of the exemption has put an end to the activities of many entrepreneurs. The way out is to determine the minimum taxes for microbusinesses at one time. in which the state budget is low. About 40 billion manats. What logic can there be in receiving concessions for a total amount that does not exceed 50 million manats from the hands of microentrepreneurs, who represent more than 90% of entrepreneurs? “Look, this question should make government officials think seriously.”
