Finance Minister Sahil Babayev said the tax burden on Azerbaijan’s non-oil and gas sector is projected at 13.5% of non-oil GDP in 2027. He made the remarks during discussion of the 2027 draft budget at the Milli Majlis Committee on Economic Policy, Industry and Entrepreneurship.
Finance Minister Sahil Babayev told lawmakers that the projected non-oil sector tax burden of 13.5% of non-oil GDP for 2027 will turn out lower in actual execution, since nominal GDP growth tends to outpace initial forecasts. He added that the state applies a conservative approach across many areas, and the share of non-oil tax revenue in GDP has remained stable for years.
The minister described this ratio as evidence of a favorable tax environment for the country’s economy. He said that to properly assess the real impact of tax incentives, one ultimately needs to look at the total share of all taxes flowing into the budget relative to GDP.
What is driving the rise in tax revenue
Sahil Babayev stressed that the 1.54 billion manat increase in tax revenue planned for next year’s budget is not linked to the emergence of new major sources of taxation. He said most of the growth stems from the overall expansion of the budget’s nominal volume.
At the same time, changes to legislation affecting income tax have also contributed to the increase. The minister noted that the budget has also forgone certain revenues because of new incentives introduced to stimulate economic activity in agriculture, tourism and other sectors.
Sahil Babayev said the process of boosting transparency in the economy is ongoing and its results will become more visible in the coming years.
