Number of labor contracts in Azerbaijan has reached new peak

The stimulating tax policy in our country has led to significant changes in the labor market and contributes to the noticeable development of entrepreneurship. For more than three years in Azerbaijan, a new approach to taxpayers has been applied: for years, entrepreneurs playing on different sides of the field and the government are now very harmonious in the same team. Such an encouragement policy also made it possible to significantly increase tax revenues, the number of concluded labor contracts and increased the degree of transparency in this area.

According to the State Tax Service under the Ministry of Economics, on December 1, 1.741.468 employment contracts were registered in the country, which is 339.553 more compared to the indicator at the beginning of 2019. In the NENEFTER sector, this indicator as of December 1 of this year grew by 287.572 units, reaching 827.494 contracts. That is, approximately 84% of the increase is associated with the activities of companies not involved in the oil sector.

Why are these numbers so important? The “circumvention” of the salary fund, an increase in the number of concluded employees between the employer and the employee of the employment contracts – for ordinary taxpayers, very positive changes are hidden behind these concepts. Official design of work means that an employee or employee is legally protected: they cannot be fired unlawfully, they will not refuse maternal leave or, for example, to pay compensation for injury to work.

“White” salary is also an opportunity to get a loan if necessary, including a mortgage, or a decent pension in old age.

The importance of these processes is well understood by business. It was thanks to the stimulating measures between the government and entrepreneurs that confidential relations were formed. As a result, as a result, on December 1, the number of active VAT payers has increased significantly – by 13.2% compared to the beginning of the year, up to 39.257 units. Note that such a positive dynamics has been observed over the past few years.

Micro- and individual entrepreneurs do not lag behind the growth rates. According to the State Committee on Statistics, on October 1, 149.048 micro- and 1.214.567 individual entrepreneurs were registered in the country. Compared to the same period last year, growth in these segments was 9% and 6.3%, respectively.

Microbusiness, which also includes most individual entrepreneurs, can count on a 75 percent discount when paying an income tax. They are exempt from property tax. Entrepreneurs engaged in innovative activities can receive a Startup certificate, which exemptions from paying income tax or income tax for 3 years. In addition, an officially working business can apply for preferential loans of the Fund for the Development of Entrepreneurship or Agency of Agrarian Lending and Development at a rate of 5-12%. Such measures allow business to realize: paying taxes is more profitable than to evade them.