AZE.US
Small businesses in Georgia operate under significantly lower tax obligations than in Azerbaijan, according to Azerbaijani economist Natig Jafarli, who pointed to differences in turnover thresholds and value-added tax (VAT) rules.
In comments posted on Facebook, Jafarli said Georgian businesses with annual turnover of up to 300,000 lari pay no tax, while those with turnover up to 500,000 lari are taxed at just 1% of revenue. In agriculture and wine-related tourism, the 1% rate applies to turnover of up to 700,000 lari.
By contrast, Jafarli argued that Azerbaijan’s recent increase in the VAT registration threshold to 400,000 manats is largely technical. He said eligibility depends on conditions such as the share of non-cash payments, which are counted at a reduced coefficient, limiting the practical effect of the higher threshold.
Jafarli also noted that although individuals make up about 87% of registered active taxpayers in Azerbaijan, they contribute just over 5% of state budget revenues, compared with roughly 26% in Georgia, which he said highlights structural differences in the two economies.