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Amendments to the Tax Code will have a positive impact on the public catering (food service) sector
Amendments to the Tax Code will have a positive impact on the public catering (food service) sector
In recent years, the role of public–private sector partnership in the sustainable development of Azerbaijan’s economy has further strengthened. Emin Dostiyari, Chairman of the Azerbaijan Food and Beverage Industrialists Association (AFBIA), commented on how the tax innovations that began to be implemented from 2026 will affect food producers.
He believes that the amendments to the Tax Code will create positive changes in terms of optimizing the tax burden and stimulating cashless payments in the public catering sector. He highlighted three key advantages.
Thus, the reduction of the simplified tax rate in the public catering sector from 8% to 6% is an innovation that will have a direct positive impact on simplified tax payers in the sector. As a result of these changes, entrepreneurs’ revenues and cash flows will improve. The lower rate and cashless payment incentives may increase profit margins, which in turn can create real opportunities for equipment renewal, improvement of service quality, and investment in new jobs.
In addition, it was noted that increasing the VAT registration threshold from 200,000 manats to 400,000 manats will create advantages for small and medium-sized enterprises. It was added that this change is a key factor contributing to a reduction in administrative and accounting burdens and to the strengthening of financial liquidity. Raising the VAT registration threshold to 400,000 manats will allow entrepreneurs to ease reporting and accounting obligations and to direct more resources toward business expansion.
On the other hand, excluding 50% of cashless turnover carried out via POS terminals in the public catering sector from the VAT tax base creates conditions for promoting cashless payments and reducing the effective tax burden. The widespread adoption of POS/CRM payments may reduce shadow turnover, expand the real tax base, and lead to increased sales in a healthy competitive environment. E. Dostiyari emphasized that this innovation, along with the reduction of the simplified tax rate in public catering to 6%, will contribute to lower costs and higher operating profitability. The changes also strengthen competition and efficient business operations.
In short, the recent changes aim to reduce the tax burden in the public catering sector while strengthening the cashless payment infrastructure, which is one of the key factors in forming a sustainable business environment.
In recent years, the role of public–private sector partnership in the sustainable development of Azerbaijan’s economy has further strengthened. Emin Dostiyari, Chairman of the Azerbaijan Food and Beverage Industrialists Association (AFBIA), commented on how the tax innovations that began to be implemented from 2026 will affect food producers.
He believes that the amendments to the Tax Code will create positive changes in terms of optimizing the tax burden and stimulating cashless payments in the public catering sector. He highlighted three key advantages.
Thus, the reduction of the simplified tax rate in the public catering sector from 8% to 6% is an innovation that will have a direct positive impact on simplified tax payers in the sector. As a result of these changes, entrepreneurs’ revenues and cash flows will improve. The lower rate and cashless payment incentives may increase profit margins, which in turn can create real opportunities for equipment renewal, improvement of service quality, and investment in new jobs.
In addition, it was noted that increasing the VAT registration threshold from 200,000 manats to 400,000 manats will create advantages for small and medium-sized enterprises. It was added that this change is a key factor contributing to a reduction in administrative and accounting burdens and to the strengthening of financial liquidity. Raising the VAT registration threshold to 400,000 manats will allow entrepreneurs to ease reporting and accounting obligations and to direct more resources toward business expansion.
On the other hand, excluding 50% of cashless turnover carried out via POS terminals in the public catering sector from the VAT tax base creates conditions for promoting cashless payments and reducing the effective tax burden. The widespread adoption of POS/CRM payments may reduce shadow turnover, expand the real tax base, and lead to increased sales in a healthy competitive environment. E. Dostiyari emphasized that this innovation, along with the reduction of the simplified tax rate in public catering to 6%, will contribute to lower costs and higher operating profitability. The changes also strengthen competition and efficient business operations.
In short, the recent changes aim to reduce the tax burden in the public catering sector while strengthening the cashless payment infrastructure, which is one of the key factors in forming a sustainable business environment.