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Minister: Azerbaijan to apply lower tax rates for lower incomes with gradual transition

19 November 2025 12:47 (UTC +04:00)

Lower tax rates will be applied to lower incomes, said Minister of Economy of Azerbaijan, Mikayil Jabbarov, during the discussion of the 2026 budget package at today’s session of the Milli Majlis on the draft law “On the State Budget of the Republic of Azerbaijan for 2026,” APA reports.

The minister said that a proposal has been made for the gradual and phased taxation of salaries in the non-oil and gas private sector: “Even if salaries up to 2,500 manats are taxed at a 7% rate in 2028, this is still twice as low compared to the 14% rate that would apply if the current benefit were fully abolished. Tax incentives for economic growth and business continue.”

Mikayil Jabbarov noted that lower tax rates for lower incomes will be applied through a soft and gradual transition over the next three years: “With the aim of preserving the favorable environment created by the President’s initiative to support the ongoing formalization process in the labor market, it has been considered appropriate to set lower tax burdens for lower incomes and implement this gradually. Within this framework, a proposal has been made for the phased and gradual taxation of salaries in the non-oil and gas private sector.”