Sahib Alakbarov: ‘Investors’ interest in participating in Karabakh’s restoration is great’

Report presents interview with Azerbaijan’s Deputy Economy Minister Sahib Alakbarov

What is the interest of foreign investors in participating in the process of restoring the Azerbaijani territories liberated from occupation?

- About 1,500 investors appealed with a request to carry out activities in Karabakh, there are foreign investors among them. However, the issue of clearing the liberated territories from mines doesn’t yet allow granting permission to everyone. However, about 100 entrepreneurs have already started work.

In general, the interest is great. However, after clearing the territories of mines, it is first necessary to return the population to their native lands so that they can work in the industries being created. All of these are interrelated issues. The work is being carried out at a very high pace, which is confirmed by the last trip of President Ilham Aliyev to the Lachin district, where the foundations of new villages, manufacturing and service enterprises were laid.

Over the past three years, more than 6.5 billion manats ($3.823 billion) of budgetary funds have been invested in the restoration of the infrastructure of Karabakh. This year, expenditures on the implementation of projects in Karabakh and East Zangazur increased by another 2.26 billion manats ($1.329 billion) [3 billion manats [$1.764 billion] were provided in the budget for 2023].

In the liberated territories, both local and foreign investors are granted exemption from all taxes for 10 years. This is a bigger advantage.

- How effective are the industrial parks being created in the country?

- Industrial parks and agricultural parks are the future of Azerbaijan. In our agricultural parks, the volume of products manufactured per hectare is almost 2 times higher than in other farms.

- Amendments to the Tax Code are currently being prepared, which will come into force in 2024. As in previous years, is the differentiation of VAT rates, which would allow businessmen to avoid double taxation, the subject of discussion?

- For many years there have been talks about the differentiation of the VAT rate, but this is a very serious issue. The issue of tax differentiation for essential goods - food, medicines, baby food was discussed. This issue is being discussed, but so far, they have not come to a consensus and there is no agreed concrete solution.

- What reforms are expected in the direction of the development of non-cash payments?

- For many years there have been talks about the use of cashless payments, but things were moving slowly. Interestingly, during the pandemic, people began to prefer this type of payment more. It is gratifying that in recent years the volume of non-cash payments has been progressively growing. After the decision was made to refund part of the paid VAT, the situation has changed even more for the better. Starting from this year, with non-cash payments, not 15% of the VAT amount is returned, as it was before, but 17.5%. Regarding cash payments, 5% instead of 10% is returned.