Azerbaijan’s draft 2027 state budget raises the income tax rate on wages for hired employees outside the oil and gas sector and state agencies from 3% to 5%. The change has already been factored into next year’s budget calculations.
Azerbaijan plans to raise the income tax rate on wages for hired employees in the non-oil and gas sector and private enterprises from 3% to 5%, according to the draft 2027 state budget discussed at a meeting of the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship. The new rate has already been included in next year’s budget calculations.
Under the draft, personal income tax revenue is projected to bring 3.07 billion manat into the state treasury in 2027. That figure is 690.7 million manat, or 29%, higher than the amount planned for 2026.
The bulk of this revenue — 2.758 billion manat — will come from tax withheld on employees’ wages. The remaining 311.7 million manat will come from tax applied to income from entrepreneurial and other activities.
The document notes that the projected increase stems not only from the higher tax rate but also from rising average wages and the restructuring of the pay system in state institutions.
