Global Integrity Report

The Global Integrity Report (report.globalintegrity.org)

Azerbaijan Home

Facts

Timeline

Notebook

Integrity Scorecard

2007 Assessment

Azerbaijan: Integrity Indicators Scorecard

Azerbaijan: Integrity Scorecard Report > Sub-Category: Taxes and Customs
Indicators		Score
58	In law, is there a national tax collection agency?	100
59	Is the tax collection agency effective?	100
60	In practice, are tax laws enforced uniformly and without discrimination?	50
61	In law, is there a national customs and excise agency?	100
62	Is the customs and excise agency effective?	88
63	In practice, are customs and excise laws enforced uniformly and without discrimination?	25

Indicator and sub-Indicator Details

In law, is there a national tax collection agency?

58: In law, is there a national tax collection agency?

Score:

YES

Comments: According to the Act on Ministry of Taxes approved March 29, 2001, there is a Ministry of Taxes.

References: Reference: The Act on Ministry of Taxes.

Peer Review Comments: See: www.taxes.gov.az

Is the tax collection agency effective?

59a: In practice, the tax collection agency has a professional, full-time staff.

Score:

100

Comments: The ministry has a full-time, professional staff. It has 2,000 employees in 14 regional offices.

References: Reference: Interview with Azer Mehtiyev, chairman of Centre for Economic Initiatives. Reports by Ministry of Taxes. www.taxes.gov.az/eng/

Peer Review Comments: I disagree with the social scientist's score. The Ministry of Taxes has sufficient professional staff to fulfill its mandate. In addition, the ministry has one of the best governmental Web sites in terms of access to tax legislation and normative acts.

59b: In practice, the tax agency receives regular funding.

Score:

100

Comments: The ministry receives regular funding from the state budget.

References: Reference: www.tax-gov.az Reports by Ministry of Finance. Reports by Parliament. www.parliament.az

Peer Review Comments: See www.taxes.gov.az

Peer Review Comments: The Ministry of Taxes has a predictable source of funding that is fairly consistent from year to year. Political considerations are not a major factor in determining agency funding.

In practice, are tax laws enforced uniformly and without discrimination?

60: In practice, are tax laws enforced uniformly and without discrimination?

Score:

100

Comments: There are some discrimination facts when it comes to tax collection, especially regarding businessmen who are not loved by the ruling party. Those businessmen are under pressure from the Ministry of Taxes. For example, in 2005, Azpetrol National Gasoline Company of Azerbaijan was announced as the "Best Model Tax Payer" in Azerbaijan by the Ministry of Taxes. But in late 2005, the president of Azpetrol had political problems with the government, and he was arrested. Since then, the Ministry of Taxes has announced several times that Azpetrol was breaking the tax law.

References: Reference: Interview with Rovshen Agayev, deputy chairman of Centre for Economic Initiatives. Reports by media. www.azadliq.az/public/print.php?id=8673 www.525ci.com/new/2007/08/18/anons=2

Peer Review Comments: Several times taxes have been used as an instrument for pressure, but in a not-so-obvious manner.

Peer Review Comments: The fact mentioned by social scientist regarding Azpetrol company was a political case rather than a tax-related matter. The Tax Ministry was just the pressure instrument of the central government in this particular case. Unlike previous years, there is significant development in the Ministry of Taxes. In general, tax laws are enforced uniformly and without discrimination. In addition, the Tax Ministry created the Internal Audit Department, which combats corruption among its staff.

Of course, some privileged groups partially avoid tax payments due to their contacts in the government, or agree to fixed amounts with tax officials.

In law, is there a national customs and excise agency?

61: In law, is there a national customs and excise agency?

Score:

YES

Comments: According to the Act on Committee of Customs approved in 1992, there is a Committee of Customs.

References: Reference: Act on Committee of Customs.

Peer Review Comments: See: www.az-customs.net/az

Is the customs and excise agency effective?

62a: In practice, the customs and excise agency has a professional, full-time staff.

Score:

100

Comments: Yes, the committee has a full-time, professional staff of about 1,000 people.

References: Reference: Interview with Azer Mehtiyev, chairman of Centre for Economic Initiatives. Reports by committee. www.az-customs.net

Peer Review Comments: The Customs Committee has a full-time, professional staff to fulfill its mandate.

62b: In practice, the customs and excise agency receives regular funding.

Score:

100

Comments: The committee receives regular revenues from the state budget, and 2 percent of the collected tax is reserved to use on behalf of committee employees.

References: Reference: Interview with Azer Mehtiyev, chairman of Centre for Economic Iniatitives. Reports by Ministry of Finance. www.finance-az.org Reports by Committee of Customs. www.www.az-customs.net

In practice, are customs and excise laws enforced uniformly and without discrimination?

63: In practice, are customs and excise laws enforced uniformly and without discrimination?

Score:

100

Comments: In practice, customs and excise laws are never enforced uniformly and without discrimination.

References: Reference: Interview with Rovshen Agayev, deputy chairman of Centre for Economic Initiatives. Reports by media and watch dog organizations. www.azadliq.az/index.php?category=8&id=6539 www.isagambar.az/2005/3101-yenimusavat.htm www.adalet-az.com/aze/2007/01/25

Peer Review Comments: Many success stories also exist.

Peer Review Comments: Corruption is the only system that rules the country, so customs and excise laws are not working properly.