en
Will income tax be deducted from salaries next year?
Will income tax be deducted from salaries next year?
“In 2026, it is projected that 2 billion 567 million manats of Azerbaijan’s state budget revenues will come from income tax payments by individuals. This is 29.05% more compared to this year. In other words, instead of 100 manats collected as income tax from individuals this year, 129 manats 50 qəpik will be collected next year.”
In Azerbaijan, the income tax forecast for individuals is increased by 29%
This was stated by economist Eldeniz Amirov.
According to the economist, there may be five reasons for this increase:
“The first reason could be the growth of salaries. However, an increase of 29–30% in wages is not expected. The second reason could be an increase in the number of jobs, but such growth in new jobs is not possible. The third reason might be the effect of inflation, but never at this scale. The fourth case could be a change in tax rates. Yet, such a change in tax rates, especially at this level, is not expected.
So how will nearly a 30% increase in tax occur? The answer lies in the expiration of a tax exemption adopted in 2019. The main reason is most likely the fact that the seven-year tax relief, which has been in force since 2019 and applied to the portion of salaries up to 8,000 manats for employees in the non-oil and non-state sectors, is no longer being extended. Thus, starting from January 1, 2026, with the expiration of this exemption, their income will also be subject to income tax.
This change will increase budget revenues by 30%. Naturally, the tax burden for individuals in this category will also rise.
The answer to the question ‘Why was this exemption introduced in 2019?’ is also simple: the main purpose was to promote employment in the non-oil sector.”
“In 2026, it is projected that 2 billion 567 million manats of Azerbaijan’s state budget revenues will come from income tax payments by individuals. This is 29.05% more compared to this year. In other words, instead of 100 manats collected as income tax from individuals this year, 129 manats 50 qəpik will be collected next year.”
In Azerbaijan, the income tax forecast for individuals is increased by 29%
This was stated by economist Eldeniz Amirov.
According to the economist, there may be five reasons for this increase:
“The first reason could be the growth of salaries. However, an increase of 29–30% in wages is not expected. The second reason could be an increase in the number of jobs, but such growth in new jobs is not possible. The third reason might be the effect of inflation, but never at this scale. The fourth case could be a change in tax rates. Yet, such a change in tax rates, especially at this level, is not expected.
So how will nearly a 30% increase in tax occur? The answer lies in the expiration of a tax exemption adopted in 2019. The main reason is most likely the fact that the seven-year tax relief, which has been in force since 2019 and applied to the portion of salaries up to 8,000 manats for employees in the non-oil and non-state sectors, is no longer being extended. Thus, starting from January 1, 2026, with the expiration of this exemption, their income will also be subject to income tax.
This change will increase budget revenues by 30%. Naturally, the tax burden for individuals in this category will also rise.
The answer to the question ‘Why was this exemption introduced in 2019?’ is also simple: the main purpose was to promote employment in the non-oil sector.”