“Tax incentives for the liberated territories will be equally applied to the Nakhchivan Autonomous Republic starting from 2026.” Economist expert Rovshan Agayev said this in an interview with Medianews.az.
He stated that the incentives effective until 2033 practically exempt businesses from almost all taxes: “I am not sure if there is a thorough and scientifically significant study on what economic results these incentives will bring in both regions. If there is, the forecasted indicators of the economies of these regions 10 and 20 years from now, as well as the contributions of both regions to the national economy, can be made public for society. Tax incentives alone are not a tool sufficient to ensure economic development. In the absence of economic freedoms and healthy competition, guarantees for property rights, and effective local governance, tax incentives alone do not yield results.
On the contrary, in the absence of the aforementioned pillars and additionally transparency and accountability, independent media, and civil society, such incentives turn into a privilege and a reward granted from above for very narrow economic groups to increase their own wealth. In many cases, they deepen socio-economic inequality between regions even further.”
According to Agayev, if the goal is to encourage free domestic resources within the country for these regions, this step can be taken for all regions with a relatively low tax burden: “These incentives will be effective only if they are attractive for high-tech and value-added production and services. However, the scale of foreign investments in the non-oil sector over the last 20-25 years is evident and the reasons are known to everyone. If it were possible to achieve economic development solely through tax incentives, a simplified 2% tax was in effect for 20 years for the regions. At the very least, small entrepreneurship in the regions could have shown incredible development thanks to this. Did it show? Where are the results?”
Or for years, business, especially those in the industrial and tourism sectors, have been offered a wide package of incentives under the investment promotion document – both related to taxes and customs payments.
What are the results in exchange for the incentives given? How many business entities have benefited from this opportunity, and how many of them have been small businesses not connected to monopolist and oligarchic groups?”
Nailə Qasımova,
Medianews.az
