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New and effective incentives for the development of entrepreneurship
New and effective incentives for the development of entrepreneurship
In recent years, public-private partnerships (PPPs) have become a cornerstone of Azerbaijan's economic development model. This collaboration leverages the resources and expertise of both the public and private sectors to drive economic growth and infrastructure development. By utilizing state budget resources, the government can attract additional private investment, accelerating development and infrastructure projects. PPP initiatives contribute to job creation, increased economic turnover, and an improved business environment, fostering a more sustainable and efficient economic model. These partnerships play a crucial role in preventing economic crises, enhancing social welfare, and ensuring overall economic stability.
Public Participation Drives Positive Changes in the Business Environment
The effective outcomes of PPPs have led to broader public participation in governmental processes. In recent years, tax legislation has been improved based on proposals from business entities, leading to reforms and the creation of new services. Since last year, there has been a more intensive acceptance of public suggestions in the preparation of tax legislation. Significant projects are being implemented in tax administration under the PPP model. Notably, measures based on the World Bank Group's "Business Ready" report's "Taxation" indicator roadmap have been realized. Over the past decade, legal and practical steps have been taken to simplify, streamline, and improve many rules and procedures regulating the business environment, aiming for high rating indicators. Azerbaijan now possesses one of the world's best practices in starting a business. Recently, the Commission on Business Environment and International Rankings approved the 2025 Roadmap for improvements and communication in the "Taxation" indicator of the World Bank Group's "Business Ready" report. The main goal of the 2025 Roadmap is to analyze the application of rules and practices that create favorable conditions for the expansion and development of the private sector, improve their attractiveness, form modern services for taxpayers, and create new electronic services.
Significant Changes Driven by Private Sector Initiatives
Business entities actively utilize tax declarations in their economic activities. In this regard, improving and simplifying declaration (report) forms, enhancing taxpayer satisfaction, and increasing the efficiency of tax administration are key tasks for tax authorities. Discussions with private sector representatives and analysis of documents from taxpayers during meetings of the "Taxation" indicator working group, led by the State Tax Service, have identified the need for improvements in the preparation of the "Unified Declaration (Report) on Withholding at the Source of Payment Related to Paid Employment." The State Tax Service has approved new versions of the declaration form and its annexes, along with updated preparation rules. These updates aim to simplify the preparation process and enhance efficiency.
Another innovation involves changes in the timing of submitting information on VAT obligations to the treasury. This adjustment extends the deadline for taxpayers to make payments from their VAT sub-account to the state budget. If taxpayers make payments by 14:15 on a business day, the relevant documents will be submitted to the State Treasury Agency by 14:30, ensuring timely processing. Previously, only payments made by 11:30 were processed on the same day. These changes aim to expedite the payment process and prevent additional interest charges for taxpayers.
These reforms, implemented with active support from government agencies and active participation from business entities, contribute to enhancing Azerbaijan's economic potential, improving the investment and business environment, and achieving high positions in international rankings. The active dialogue between the government, private sector, and civil society will significantly contribute to advancing the national tax system and promoting economic reforms. This, in turn, promises favorable opportunities for both the country's economic ranking and social welfare.
In recent years, public-private partnerships (PPPs) have become a cornerstone of Azerbaijan's economic development model. This collaboration leverages the resources and expertise of both the public and private sectors to drive economic growth and infrastructure development. By utilizing state budget resources, the government can attract additional private investment, accelerating development and infrastructure projects. PPP initiatives contribute to job creation, increased economic turnover, and an improved business environment, fostering a more sustainable and efficient economic model. These partnerships play a crucial role in preventing economic crises, enhancing social welfare, and ensuring overall economic stability.
Public Participation Drives Positive Changes in the Business Environment
The effective outcomes of PPPs have led to broader public participation in governmental processes. In recent years, tax legislation has been improved based on proposals from business entities, leading to reforms and the creation of new services. Since last year, there has been a more intensive acceptance of public suggestions in the preparation of tax legislation. Significant projects are being implemented in tax administration under the PPP model. Notably, measures based on the World Bank Group's "Business Ready" report's "Taxation" indicator roadmap have been realized. Over the past decade, legal and practical steps have been taken to simplify, streamline, and improve many rules and procedures regulating the business environment, aiming for high rating indicators. Azerbaijan now possesses one of the world's best practices in starting a business. Recently, the Commission on Business Environment and International Rankings approved the 2025 Roadmap for improvements and communication in the "Taxation" indicator of the World Bank Group's "Business Ready" report. The main goal of the 2025 Roadmap is to analyze the application of rules and practices that create favorable conditions for the expansion and development of the private sector, improve their attractiveness, form modern services for taxpayers, and create new electronic services.
Significant Changes Driven by Private Sector Initiatives
Business entities actively utilize tax declarations in their economic activities. In this regard, improving and simplifying declaration (report) forms, enhancing taxpayer satisfaction, and increasing the efficiency of tax administration are key tasks for tax authorities. Discussions with private sector representatives and analysis of documents from taxpayers during meetings of the "Taxation" indicator working group, led by the State Tax Service, have identified the need for improvements in the preparation of the "Unified Declaration (Report) on Withholding at the Source of Payment Related to Paid Employment." The State Tax Service has approved new versions of the declaration form and its annexes, along with updated preparation rules. These updates aim to simplify the preparation process and enhance efficiency.
Another innovation involves changes in the timing of submitting information on VAT obligations to the treasury. This adjustment extends the deadline for taxpayers to make payments from their VAT sub-account to the state budget. If taxpayers make payments by 14:15 on a business day, the relevant documents will be submitted to the State Treasury Agency by 14:30, ensuring timely processing. Previously, only payments made by 11:30 were processed on the same day. These changes aim to expedite the payment process and prevent additional interest charges for taxpayers.
These reforms, implemented with active support from government agencies and active participation from business entities, contribute to enhancing Azerbaijan's economic potential, improving the investment and business environment, and achieving high positions in international rankings. The active dialogue between the government, private sector, and civil society will significantly contribute to advancing the national tax system and promoting economic reforms. This, in turn, promises favorable opportunities for both the country's economic ranking and social welfare.