Targeted budget funds in Azerbaijan will be abolished, and their revenues will be unconditionally transferred to the state budget, APA reports.
Relevant amendments are proposed to the Forestry Code, Criminal Code, Tax Code, Code of Administrative Offenses, and the laws "On Subsoil," "On Waste," "On Wildlife," "On Environmental Protection," "On Medical Insurance," "On Highways," "On Specially Protected Natural Areas and Sites," "On the Budget System," "On Public Debt," "On Customs Tariff," "On Protection of Green Spaces," "On Non-Cash Payments," "On the Chamber of Accounts," "On Public Procurement," and "On Fisheries."
The draft was prepared within the framework of Decree No. 789 of the President of the Republic of Azerbaijan dated September 10, 2026, "On Additional Measures Regarding the Use of Targeted Budget Funds Established Within the State Budget and Extrabudgetary Funds of Organizations Financed from the State Budget."
The draft proposes abolishing targeted budget funds, unconditionally transferring revenues derived from fines and compensation for damages, which constitute sources of income for these funds, to the state budget, and establishing an allocation mechanism for other financial sources to finance the social protection of employees of the authorities to which the funds are subordinate.
Currently, the resources of targeted budget funds operating in the country are formed and used on various legal grounds and through different financial management mechanisms. An analysis of existing practices shows that the management of resources from certain funds in parallel with the state budget creates additional difficulties in fiscal planning, resource allocation, treasury execution, reporting, and financial oversight.
In particular, managing certain funds that are closely linked to state budget revenues and expenditures, especially those intended to finance infrastructure and investment-related activities, outside the general budget framework limits the application of the principles of unity and completeness in public finance, complicates the systematic allocation of budget resources according to priorities, and weakens oversight of the use of funds.
The adoption of the draft will ensure the improvement of mechanisms for managing the resources of targeted budget funds, the application of a more efficient financial management model in accordance with their economic nature and functional purposes, the management of public finances based on unified principles, and stronger oversight of the targeted use of budget funds.
A management model corresponding to the economic nature of targeted budget funds will be established, the quality of fiscal planning will be improved by concentrating financial flows directly related to the state budget within the state budget, and a more flexible management mechanism will be developed for the prompt financing of measures related to the protection, restoration, and use of environmental and natural resources. The functional division between budgetary and extrabudgetary funds will also be more clearly defined.
According to calculations for 2026, the total revenues of targeted budget funds are projected to amount to AZN 472.3 million. The draft is aimed not at creating new financial obligations but at reclassifying and managing existing financial flows in a more efficient and targeted manner.
Thus, the following funds will be abolished:
- Fund for Forest Conservation and Reproduction
- State Fund for the Restoration of the Mineral Resource Base
- Vehicle Recycling Fund
- State Environmental Protection Fund
- Fund for the Replenishment, Restoration and Protection of Aquatic Biological Resources
- Funds Established for the Management and Protection of Specially Protected Natural Areas
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