Annual incomes from road tax as a result of amendments in Tax Code to make AZN 78 mln - ANALYSÄ°S

Annual incomes from road tax as a result of amendments in Tax Code to make AZN 78 mln               - <span style="color: red;">ANALYSÄ°S
# 13 January 2015 13:49 (UTC +04:00)

Baku. Musa Ahmadov - APA-Economics. Annual incomes from road tax as a result of amendments in Tax Code to make AZN 78 mln.

According to APA-Economics calculations, these amendments will lead to increase of receipts by 3.5 times.

The point is that the receipts from road tax to the state budget have started to decline since 2013. So, copmpared to 2012, the receipts from road tax in 2013 dropped 15% to AZN 24,383,500. Moreover, the downward tendency continued next year too. In 2014, this index fell 8.5% to AZN 22,313,900. In 2014, the downward on road tax made AZN 6,341,140 or 22.1%.

The downward of receipts on road tax was caused by the decision of the Cabinet of Ministers regarding amendments in ““Model of Regulation on rules of state official checkup of vehicles and their trailers” dated to April 20, 2013. So, according to this decision, exemption of vehicles from official checkup within next 4 years from its production date, official checkup of vehicles once in two years after 4 years caused downward of the receipts. Because, the vehicle owners were paying road tax as following:

Name of taxation object

Rate of road tax

Vehicles, buses and other motor transport facilities:

  • Engine volume 2,000 sm³

  • Engine volume from 2,000 sm³-to 3,000 sm³

  • Engine volume from 3,000 sm³-to 4,000 sm³

  • Engine volume from 4,000 sm³-to 5,000 sm³

  • Engine volume 5,000 sm³ and mor

20 manat

20 manat + AZN 0.02 for each sm³- from 2,000 sm³

40 manat+ AZN 0.03 for each sm³- from 3,000 sm³

70 manat+ AZN 0.04 for each sm³- from 4,000 sm³

110 manat + AZN 0.05 for each sm³- from 5,000 sm³

On January 13, in accordance with the law on “amendments in Azerbaijan Tax Code” dated to December, 30, 2014, oil products tariffs were reviewed at the next meeting of Tariff Council and price of AI-92 gasoline including road tax was determined at AZN 0.72 for 1 lt, diesel at AZN 0.62.

Simple calculation: if the vehicle with the engine volume of 2,000 sm³ consumes 100 litres in a month, the vehicle owner will have to indirectly pay AZN 24 road tax in a year. Or, if the vehicle with the engine volume of 3,600 sm³ consumes 100 litres in a month, annual road tax for this vehicle will make AZN 24. That’s the road tax will be AZN 34 less than previous. However, if such automobile consumes 250 litres gasoline in a month, then the owner will have to pay AZN 60 in annual, which is AZN 2 more than previous. That’s the high fuel consumption means that the road tax paid indirectly is more than previous. In other word, the road tax will not levied once and for all. After that, the road tax will depend on volume of consumed fuel.

Tariff Council bases the relevant tariff regulation as following:

“As it’s known, the annual road taxes were paying by individuals through official checkup of their vehicle depending on engine volume, by legal entities through submitting relevant declaration to the tax authorities for vehicles in their balance. In this case, the individuals and legal entities were paying road tax for useless vehicles regardless of whether they use motor roads or not. According to amendments to the Tax Code, application of road tax by adding AZN 0.02 to the wholesale price of 1 lt of gasoline, diesel and gas, which are produced in the country and directed to the consumption and imported”.

As a result of addition of road tax to the fuel price, the tax payment process and administration on tax levying are simplified, persons less using vehicles pay less tax, annual tax is paid partly, submission of declarations by legal entities is cancelled, taxes are levied fully.

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