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Tax Payable by Taxi Drivers Announced – AMOUNT
The taxation rules for taxi services in Azerbaijan are set to change.
According to AZE Finance, a business and financial news portal, under the proposed amendments to the Tax Code, taxi drivers will pay tax amounting to 1% of their monthly turnover starting from early 2027.
The State Tax Service has explained how this tax will be calculated and approximately how much drivers will have to pay.
Nijat Imanov, Head of the Main Department of Tax Policy at the State Tax Service, has clarified the new tax mechanism for taxi services.
Nijat Imanov noted that some of the proposed amendments to the Tax Code are aimed at strengthening tax oversight. Several new measures are planned as part of these efforts, including changes to tax administration in the taxi services sector.
It should be noted that taxi drivers already pay taxes under the current system. Their tax payments are made through the purchase of a special permit for taxi operations. Drivers currently pay AZN 18 when obtaining this permit.
Although this method is simple, the State Tax Service considers it unfair, as drivers with different income levels pay the same amount of tax. As a result, the government now plans to introduce a tax system based on turnover.
“The new proposal envisages a more balanced, income-based taxation model. Accordingly, a 1% tax will be withheld from taxi turnover, meaning the amount payable to drivers. The tax will not be calculated and paid by taxi drivers themselves; instead, the operators they work with will calculate and withhold it at source before making the payment. This will eliminate the administrative burden on individuals providing taxi services.”
As a result, taxi drivers with lower turnover will pay less tax, while those with higher turnover will pay more, based on the 1% rate. According to the State Tax Service, this is a fairer approach. The authority also assures that the changes will not increase the tax burden on taxi drivers.
“Based on our analysis, the average amount is estimated to be around AZN 18–20. There are also a number of taxpayers whose earnings are below this amount. We believe that taxpayers with lower earnings will benefit from this change.”
It should be noted that, under the draft amendments to the Tax Code, a 1% tax will be withheld from income paid by operators to taxpayers providing passenger transportation services by taxi within the country.
The taxation rules for taxi services in Azerbaijan are set to change.
According to AZE Finance, a business and financial news portal, under the proposed amendments to the Tax Code, taxi drivers will pay tax amounting to 1% of their monthly turnover starting from early 2027.
The State Tax Service has explained how this tax will be calculated and approximately how much drivers will have to pay.
Nijat Imanov, Head of the Main Department of Tax Policy at the State Tax Service, has clarified the new tax mechanism for taxi services.
Nijat Imanov noted that some of the proposed amendments to the Tax Code are aimed at strengthening tax oversight. Several new measures are planned as part of these efforts, including changes to tax administration in the taxi services sector.
It should be noted that taxi drivers already pay taxes under the current system. Their tax payments are made through the purchase of a special permit for taxi operations. Drivers currently pay AZN 18 when obtaining this permit.
Although this method is simple, the State Tax Service considers it unfair, as drivers with different income levels pay the same amount of tax. As a result, the government now plans to introduce a tax system based on turnover.
“The new proposal envisages a more balanced, income-based taxation model. Accordingly, a 1% tax will be withheld from taxi turnover, meaning the amount payable to drivers. The tax will not be calculated and paid by taxi drivers themselves; instead, the operators they work with will calculate and withhold it at source before making the payment. This will eliminate the administrative burden on individuals providing taxi services.”
As a result, taxi drivers with lower turnover will pay less tax, while those with higher turnover will pay more, based on the 1% rate. According to the State Tax Service, this is a fairer approach. The authority also assures that the changes will not increase the tax burden on taxi drivers.
“Based on our analysis, the average amount is estimated to be around AZN 18–20. There are also a number of taxpayers whose earnings are below this amount. We believe that taxpayers with lower earnings will benefit from this change.”
It should be noted that, under the draft amendments to the Tax Code, a 1% tax will be withheld from income paid by operators to taxpayers providing passenger transportation services by taxi within the country.