Azerbaijani Economy Ministry discloses details of state programs to reduce coronavirus impact

The Azerbaijani Ministry of Economy has disclosed a basic document containing the main directions of the programs prepared in connection with the state support of various sectors of the economy, including entrepreneurship, their coverage, basic tools of supporting the economic growth and entrepreneurship.

Among these directions are a financial support program for the payment of salaries to 304,600 hired employees in the spheres affected as a result of coronavirus (to preserve jobs) and a financial support program for 292,000 individual (micro) entrepreneurs working in the sectors affected as a result of coronavirus (to preserve jobs);

A program of tax incentives, benefits and vacations for business entities working in the spheres affected as a result of coronavirus, and a program of credit and guarantee support for business entities operating in the sectors affected as a result of coronavirus to get the newly issued bank loans worth 1 billion manat ($588.2 million) are also among these measures.

These measures also include the provision of micro entrepreneurs with benefits on simplified taxation for a certain period; exemption for a certain period from property and land taxes; exemption of taxpayers from income tax in the appropriate amount and for the appropriate period; reduction of the simplified tax for people engaged in activity in the field of catering while those who pay income tax will be exempted from it.

The exemption of certain taxpayers from VAT for a certain period; exemption from current tax payments for the corresponding period in the spheres of activity for which privileges will be given; extension of the period for paying income tax as of 2019; extension of the deadline for submitting tax reports, as well as tax payments; temporary exemption of some types of food and medical products necessary for the population from VAT (exemption of import and sale of certain types of products from VAT) are also among these measures.

To rapidly regulate the needs of the population in food, medical and other necessary types of products, raw materials for their production are exempt from VAT.

The deduction of donations transferred by individuals and legal entities to Azerbaijan’s Fund to Support Fight against Coronavirus from the income through which income tax is withheld; withholding of VAT at a zero rate for rendering irreplaceable services by the taxpayer in connection with the prevention of coronavirus are among these measures.

Among these measures are the credit and guarantee support program on provision of business entities operating in the sectors affected as a result of coronavirus with newly issued bank loans (0.5 billion manat) that’s $0.3 billion, providing a state guarantee for 60 percent of new loans in the amount of 500 million manat ($294 million ); maximal interest rate of loans no higher than 15 percent, loan term up to three years.

Subsidizing of a half (7.5 percent out of 15 percent) of interest on guarantee loans through the budget; allocation of additional funds to the Entrepreneurship Development Fund; the credit and guarantee support program on the existing loan portfolio of business entities working in the spheres affected as a result of coronavirus (1 billion manat) that’s $588.2 million are among these measures.

These measures also include a social package to support the financial situation of the population; allocation of funds for social assistance (unemployment benefits, social assistance, etc.); a program related to the payment of the costs for the study of students who are members of families belonging to a socially vulnerable layer of the population:

Allocation of special funds; financial support program for the mortgage and credit guarantee mechanism, allocation of additional funds; the support program related to the utility bills on electricity consumption of the population, an increase in the limit on preferential electricity consumption for the population in the volume of 100 kilowatt hours; the support program for the spheres of vital passenger transportation, allocation of special funds are among these measures.