Statement on the implementation of measures entrusted to the Ministry of Economy
In the Action Plan on implementation of paragraph 10.2 of Order of President of the Republic of Azerbaijan No. 1950 dated March 19, 2020 “On a number of measures to reduce the negative impact of the coronavirus (COVID-19) pandemic and, consequently, sharp fluctuations in world energy and stock markets on the economy of the Republic of Azerbaijan, macroeconomic stability, employment and entrepreneurship”
On the implementation of measures entrusted to Ministry of Economy
Ministry of Economy operatively collects and analyzes information on changes in country’s economy and appropriate prompt measures are taken in order to reduce negative impact of the Coronavirus (COVID-19) pandemic, as well as sharp fluctuations in world energy and stock markets on the Azerbaijani economy.
In order to ensure implementation of paragraph 10.2 of the Order of President of the Republic of Azerbaijan dated March 19, 2020, Cabinet of Ministers approved the Action Plan on April 4, 2020. The Action Plan covers three directions – support for economic growth and entrepreneurship, support for employment and social welfare, macroeconomic and financial stability.
Implementation of the measures entrusted to Ministry of Economy in the Action Plan is divided into 3 stages. At the initial stage, it is planned to implement measures on paying definite part of salaries of employees working in the areas which affected by pandemic, providing financial support to individual (micro) entrepreneurs, as well as providing tax incentives to protect economic activity.
Ministry of Economy informs public and taxpayers about work, which will be carried out at the initial stage:
In the direction of protecting workplaces and social stability:
In order to prevent reduction of the number of workplaces in the areas affected by pandemic, a mechanism for paying definite part of salaries of employees working based on employment contract has been prepared and implementation of payments will begin this week.
This measure implies provision of financial support by state to entrepreneurs in amount of 215 million manat to paying definite part of the salaries of 300,000 employees (who have employment contracts) working in the areas which affected by pandemic and clusters. Based on the appeals presented by employers through the electronic offices which is available in the Internet Tax Office (www.e-taxes.gov.az), a certain part of salary to be paid to their employees will be transferred to bank accounts of employers as soon as possible and employers will be able to pay employees’ salary.
Providing financial support to individual (micro) entrepreneurs operating in the areas affected by pandemic.
This measure implies provision of financial support by state in the amount of 80 million manat to 300,000 individual entrepreneurs who engaged in entrepreneurial activities in the areas which affected by pandemic. This financial assistance will be applied to taxpayers who have paid taxes, compulsory state social insurance and unemployment insurance in 2019.
To ensure providing financial support as soon as possible, individual entrepreneurs submit appeals through electronic cabinets available at the Internet Tax Office (www.e-taxes.gov.az) and the funds allocated from state budget are transferred to bank accounts of these individual entrepreneurs.
In case of disposal of bank accounts in connection with taxpayer, who is an individual entrepreneur, debt to state budget or extra-budgetary state funds, the bank will be instructed not to freeze or delete transferred funds, allocated funds will be delivered to the addresses.
Process Maps, which reflect the exact implementation mechanism of this work, have been prepared, and detailed information about this will be delivered to both employers and individual entrepreneurs through their personal e-cabinets, SMS and notifications in the near future.
At the moment, Ministry of Economy is finalizing specification process of list of employees who working on a contract basis in the areas which affected by pandemic, as well as individual entrepreneurs.
In the direction of providing tax incentives for protection of economic activity:
Provision of significant tax benefits and strikes to entrepreneurship subjects (including small and medium enterprises) operating in the areas affected by pandemic.
This measure will be implemented in the activity fields affected by pandemic (domestic passenger transport by road (including taxis), inn, hotels, hostels and similar facilities which considered means of accommodation, tour operators and tour agents, transportation and (or) delivery of goods on order, including meal, food and non-food items, public catering, organization of exhibitions, stage, recreation and entertainment (game), cinema, theater, museum and concert halls, sports and health facilities, training (training) and advanced training courses, children’s education and development centers, children’s clubs, psychological centers, activities related to ensuring health and safety of population in areas or other areas fully or partially restricted by Operational Headquarters under Cabinet of Ministers) to reduce the tax burden on taxpayers operating in areas , to extend the deadlines for the fulfillment of tax obligations and reporting, and to provide tax benefits and strikes covering other issues.
It is planned to granting discounts to entrepreneurship subjects operating in the above areas affected by pandemic such as profit (income) tax, simplified tax, property and land taxes, as well as temporary tax exemptions for tax at the source of payment for real estate leased from individuals, granting temporary exemption from current tax payments on profit (income) and property tax, submission of tax reports (profit (income) tax, property tax, simplified tax) by micro-entrepreneurship entities and extension of tax payment period, extension of the deadline for payment of taxes assessed in the reports on profit (income) tax and property tax submitted by taxpayers who are not micro-business entities, and providing tax benefits and vacations, such as deduction of expenses incurred by the taxpayer for necessary preventive measures, including disinfection, to expenses deductible from income without limitation.
In addition, import of some types of products necessary for food and medical needs of population, also in order to meet the needs of the population in food, medicine and other necessary products in a short time, exemption of import of raw materials and supplies related to the production of certain types of products from VAT for a certain period, deferral of interest accrual on unpaid taxes, compulsory state social insurance and unemployment insurance premiums and reduction of social insurance burden on a number of business entities are currently under discussion stage.
In connection with above, law projects have been prepared which contains necessary amendments in Tax Code and “Law on Social Insurance”. Those law projects are expected to be discussed and approved in the coming days, after that detailed information will be given to public about essence and application of the changes, concessions and exemptions.
Consideration of capital and property amnesty in the country in order to expand economic sources of economic growth and investment, issuance of state guarantees on bank loans in the amount of 0.5 billion manat to be provided to entrepreneurship subjects who operating in the areas affected by pandemic and subsidizing interest rates, subsidizing interest rates on loan portfolio in the amount of 1 billion manat which exists on March 10, 2020, taking measures to increase and stimulate export of non-oil products, implementation of measures to provide population with imported products necessary for food and medical needs and taking of necessary measures in other areas continues and informing public about these cases will be provided.