Azerbaijan’s Chamber of Accounts has warned that the State Customs Committee may fall short of its 2027 revenue target by roughly 300 million manats ($176 million), according to its opinion on the draft 2027 state budget.
The Chamber of Accounts’ review of the draft 2027 state budget says the State Customs Committee is expected to bring in about 6.87 billion manats ($4.04 billion) next year. That figure would exceed the actual 2025 result by 498.1 million manats (7.8%) and the 2026 forecast by 6 million manats (0.1%). The projection hinges on imports reaching 32.2 billion manats ($18.9 billion), but the Chamber warns that tax breaks and exemptions on imported goods could cut into customs revenue.
According to the Chamber’s calculations, the ratio of customs revenue to import volume in 2027 will be 0.6 percentage points higher than the actual 2025 level but 0.3 percentage points lower than the 2026 forecast.
Past shortfalls underline the risk
In 2025, imports came in at $18.1 billion rather than the forecast $18.4 billion, and the State Customs Committee’s revenue target of 6.6 billion manats ($3.88 billion) was missed — actual receipts totaled 6.37 billion manats ($3.75 billion), falling 230.1 million manats (3.5%) short of plan.
For 2026, imports were projected at $18.7 billion, but actual imports over the first nine months reached only $13.2 billion. Over that period, the Customs Committee transferred 4.97 billion manats to the budget, 10.7 million manats (0.2%) below the planned 4.98 billion manats.
Given expectations that this year’s imports will again fall short of forecast, the Chamber estimates annual customs revenue will land around 6.6 billion manats, some 300 million manats (4.3%) below the approved projection. The report notes that, despite this, the practice of basing next year’s customs revenue forecast on a cumulative year-on-year growth figure continues.
The Chamber of Accounts pointed to uncertainty in the global economic environment — particularly shifts in the economic behavior of Azerbaijan’s main trading partners — as a factor that could affect import volumes. It added that disruptions to supply chains could reduce foreign trade turnover and hinder full implementation of the customs revenue forecast.
VAT, excise and customs duty projections
VAT receipts from imported goods in 2027 are expected to reach 4.7 billion manats ($2.76 billion), down 50 million manats (1.1%) from the 2026 forecast but up 377.7 million manats (8.7%) from the actual 2025 figure. The Chamber attributes the rise mainly to imports climbing to a projected $19 billion, up $900 million (5%) from 2025’s actual level.
At the same time, VAT receipts from non-oil and gas sector enterprises in which the state holds a 51% stake or more are expected to fall by 80 million manats (40%), while receipts from other resident and non-resident legal entities will drop by 45 million manats (1.2%). VAT on goods imported by individuals is projected to rise by 10 million manats (1.7%), and VAT from budget organizations and state-founded legal entities is expected to grow by 5 million manats (5.9%).
Excise tax revenue for 2027 is forecast at 240 million manats ($141.2 million), up 6 million manats from the 2026 forecast and 7.3 million manats from the actual 2025 figure. The Chamber attributes the increase to the inclusion of sugary mineral and carbonated drinks, as well as potato chips, on the list of excisable goods. Excise revenue from petroleum products is expected to rise by 6 million manats (31.6%) and from alcoholic beverages by 4 million manats (8%), while revenue from drinking alcohol is projected to fall by 3.7 million manats (31.6%), from beer by 2.1 million manats (20%) and from tobacco products by 2 million manats (10%).
Customs duty revenue is projected at about 1.87 billion manats ($1.1 billion) for 2027, up 49 million manats from the 2026 forecast and 96.2 million manats from the actual 2025 figure. The Chamber says the main driver will be a 93 million manat (7.2%) rise in import duties paid by legal entities, while duties paid by individuals are expected to fall by 34 million manats (13.1%).
Road tax revenue is forecast at 61 million manats ($35.9 million), up 1 million manats from the 2026 forecast and 17 million manats (38.6%) from the actual 2025 figure. The Chamber links this to an increase in the per-liter tax rate. Road tax on imported fuel is expected to fall by 3.5 million manats (12.5%), while revenue from vehicles registered in foreign countries is projected to rise by 4.5 million manats (14.1%).
The Chamber of Accounts concluded that past execution results, the first nine months of this year’s performance, and the likelihood that imports will again miss their target all point to a risk that the State Customs Committee’s 2027 budget revenue will not be fully met. It stressed the need to factor in not just import volumes but also shifts in the international trade environment and the impact of various exemption mechanisms when forecasting customs revenue.
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