Azerbaijani economy minister talks on new benefits for non-oil sector

Azerbaijan is proposing new tax breaks and incentives to develop the non-oil private sector and increase economic transparency, Minister of Economy Mikayil Jabbarov said at a meeting of the Parliamentary Committee on Economic Policy, Industry, and Entrepreneurship, where the 2026 state budget was discussed, Report informs.

The minister noted that proposals have been prepared for a phased taxation of transactions in the non-oil sector while maintaining a low tax burden.

"This was a difficult topic for discussion. There were different points of view, but the final document reflects a unified, agreed-upon approach," Jabbarov emphasized.

According to the minister, as part of the new initiatives, draft amendments to the Tax Code aimed at stimulating investment, expanding entrepreneurship, and increasing transparency have been submitted to parliament.

Jabbarov also listed the main tax initiatives presented in the bill: tax breaks for entrepreneurs in the Nakhchivan Autonomous Republic, similar to those received by companies in the liberated territories; incentives for the production of buses and trucks in the transport sector; classifying fish farming as agriculture, which will allow this sector to be completely exempt from taxes; reducing tax rates for the catering sector to support cashless payments; and raising the mandatory VAT registration threshold from 200,000 to 400,000 manats ($235,200).

Mikayil Jabbarov also noted that tax reforms in recent years have made a significant contribution to the legalization of labor relations and transparency in the labor market.

"From January 1, 2019, to October 1, 2025, the number of employment contracts in the non-oil and gas private sector increased by 471,000, exceeding 1 million. The share of officially registered workers increased from 38.5% to 54.1%. At the same time, the share of budget transfers in the State Social Protection Fund's revenues decreased from 35.6% in 2018 to 17.5% from 2018 to 2024," he emphasized.