16.5% of Azerbaijani companies are dissatisfied with tax rates

“16.5% of Azerbaijani companies are dissatisfied with tax rates.”

The World Bank’s 2024 Enterprise Survey (WBES) has analyzed the views of 368 officially operating companies in Azerbaijan regarding the tax system, APA-Economics reports. According to the results, 16.5% of respondents identified tax rates as the biggest obstacle to their operations. This figure represents the highest among all the issues cited by businesses and highlights a key area for improving the business environment in the country.

Companies believe that tax obligations are relatively burdensome compared to their actual business turnover. This burden is especially felt by small and medium-sized enterprises (SMEs).

Many entrepreneurs also report that the preparation and submission of tax declarations is complicated and time-consuming. In some cases, vague tax regulations and frequently changing rules make planning difficult for businesses.

Additionally, challenges remain in adapting to electronic systems: “Although electronic tax filing has become widely implemented, technical limitations and low digital literacy in some regions hinder the process.”

The survey also notes that officially registered companies are dissatisfied with the fact that some businesses operating illegally evade tax obligations. This creates an unfair competitive environment and undermines the position of compliant firms.

Overall, according to the World Bank’s survey, the tax burden is a priority issue in strengthening Azerbaijan’s business climate: “A stable, transparent, and simplified tax system for entrepreneurs will not only increase tax revenues, but also improve the investment environment, reduce the shadow economy, and promote fair competition.”

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