AZE.US
Azerbaijan’s outstanding tax debt reached 4.05 billion manats ($2.38 billion) as of July 1, rising by 741.6 million manats ($436 million), or 22.4%, since the beginning of the year.
Economist and politician Natig Jafarli described the increase as another warning sign for the country’s economy, arguing that both state-owned enterprises and private companies are struggling to meet their tax obligations.
Jafarli said major state companies, including Azerenergy and the former Azersu, have traditionally accumulated substantial tax arrears. However, he noted that the authorities do not publish a detailed breakdown showing how much of the total debt belongs to state-owned and private entities.
The increase in tax debt among private businesses is particularly concerning, he said.
According to Jafarli, growing arrears may indicate that companies are experiencing lower revenue and turnover. That, in turn, could reduce investment, slow job creation and weaken broader economic activity.
“If turnover and income are declining, companies are not making new investments. Without investment, new jobs are not created and economic activity slows,” he wrote on Facebook.
Jafarli attributed the trend to weaker economic growth, reduced creation of added value and policies that fail to provide sufficient incentives for business activity. He also criticized Azerbaijan’s approach to taxes, customs duties and financial penalties.
The economist contrasted the situation with neighboring Armenia, saying Azerbaijan has become increasingly absorbed in historical debates at a time when Armenia is experiencing an economic boom.
AZE.US