Swiss Embassy: Second phase of Global Tax Program will contribute to reforms in Azerbaijan

Switzerland is looking forward to further working together with the Government of Azerbaijan and the World Bank to help improve the taxation system, Deputy Head of Mission of the Swiss Embassy to Azerbaijan, Head of International Cooperation Alberto Hernandez told News.Az.  

He made the remarks on Friday commenting on the beginning of second phase of the Global Tax Program.

“The Government of Azerbaijan has already undertaken reforms in the main fields of economic governance such as Domestic Resource Mobilization and tax administration among others. We are convinced that the recently approved second phase of the Global Tax Program will contribute to these reforms,” the diplomat said.

The embassy also added that Switzerland’s development cooperation has been actively engaged in Azerbaijan since more than 20 years: “SECO has recently approved a second phase of the Global Tax Program, which will run from mid-2020 to mid-2022. It will be implemented by the World Bank Group's International Bank for Reconstruction and Development. The envisaged budget for the second phase of the program is USD 1.6 million, which represents an increase of USD 1.1 million compared to the first phase of this program”. 

The positive results of the first phase paved the way for a more comprehensive and systematic technical assistance program. The overall objective of this program is to assist the Ministry of Taxes (currently, the State Tax Service) to make tax policy and administration more efficient and effective through informing and enhancing local capacities. In a medium- and long-term perspective, the second phase is expected to adopt a comprehensive and holistic approach to tax reform, which would help ensure fiscal sustainability in the country. In particular, the second phase will focus on:

1) Comprehensive approach to Domestic Resources Mobilization reform, including i) increase the accuracy of taxpayer registry, (ii) improve the risk management framework and (iii) measures to broadening the tax base and thus reduce the shadow economy.

2) Tackling socio-economic consequences of the global heath and economic crisis caused by

COVID-19. Acknowledging the current global challenges, this program will also be able to support the State Tax Service (former Ministry of Taxes) in its immediate response to the COVID-19 situation. Short-term just-in-time activities will be developed closely with the authorities and could include: i) business contingency plans (regularly updated based on risk analysis), ii) short-term compliance management strategies, iii) taxpayers services, as well as iv) communication strategies.

The Swiss State Secretariat for Economic Affairs (SECO), which is the Swiss agency responsible for economic cooperation, has been supporting the local authorities in their efforts to improve the macroeconomic environment, as well as enhancing business climate and private sector development in Azerbaijan during this time.

News.Az 

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