As of January 1, 2026, 145 amendments to 45 articles of the Tax Code have come into force. The main part of these amendments aims to reintroduce tax and insurance payments with expired grace periods into the tax regime, apply new tax incentives, and improve tax administration.
In this situation, it raises the question of who will lose and who will gain from the new tax changes in Azerbaijan.
In a statement to Modern.az on the topic, Azer Badamov, a Member of the Milli Majlis, noted that starting this year, taxes and insurance payments with expired grace periods are being gently and more lightly reintroduced into the tax regime.
“Both the profit tax to be paid by employees in the non-oil sector and the burden of insurance payments will be calculated with a lower tax burden than during the period when activities continued with applied concessions. This will enable entrepreneurs and taxpayers to make payments at a lower rate.”
Fishing, Nakhchivan Autonomous Republic, shipbuilding industry will benefit:
“One of the areas where tax incentives will be applied is fish farming in agriculture. Here, entrepreneurs are exempt from tax for a specified period and are stimulated to develop this industry with higher incomes. The Nakhchivan Autonomous Republic has also been included among the territories where tax exemptions are widely applied. This will serve to revive Nakhchivan's economic potential and create new jobs. Nakhchivan's tax exemption will stimulate entrepreneurs to invest here and pave the way for the opening of new production facilities. Another area exempt from tax is the shipbuilding industry. This will enable the shipyard to increase foreign orders by ensuring competitive operations.
“The amendments made to the Tax Code also include the improvement of tax administration. The goal here is based on enabling more transparent taxpayers to carry out reporting and control remotely. The amendment, which came into force at the beginning of this year, will contribute to increasing the competitiveness and development of the country's economy,” the deputy noted.
Commenting on the changes related to taxes withheld from salaries, Economist Akram Hasanov stated that the innovation will not pass unnoticed by citizens. He noted that the reason for this is that the tax mechanism, which has not been applied for seven years, will be partially increased starting this year and gradually in subsequent years.
“In the current situation, both those who receive salaries and those who pay salaries, i.e., entrepreneurs, are in a risk group. If the entrepreneur does not increase the salary, in this case, the citizen will be affected, because their net income will decrease compared to last year. If the entrepreneur partially or fully increases the employee's salary to compensate for the tax burden, this time the loss will fall on the entrepreneur.”
According to the economist, the entrepreneur will not be able to bear the additional cost incurred and will consequently try to compensate for this loss by increasing the price of the product sold or the service provided. This will ultimately affect the entire society, especially consumers.
Akram Hasanov added that against the backdrop of declining oil revenues, the attempt to compensate for this loss through taxes is understandable. However, in his opinion, reducing unnecessary and inefficient expenditures as an alternative would be a more appropriate and rational approach.
