The Azerbaijani state budget has been insured against foreign shocks and no great impact will be observed, Azerbaijani Finance Minister Samir Sharifov said.
Sharifov made the remark in Baku at the meeting of the Cabinet of Ministers, chaired by Prime Minister Ali Asadov and dedicated to the situation in the global energy market and its impact on the country's economy, Trend reports on March 12.
Having informed about the possibilities of the impact of a decrease in oil prices on revenues and expenditure of the state budget for 2020, Sharifov stressed that a decrease in oil prices on the world market will undoubtedly also lead to a decrease in Azerbaijan’s income.
“While considering the state budget approved for the current year, we see that the main sources of budget revenues are tax revenues, tax payments by SOCAR, the State Oil Company of Azerbaijan Republic, and the companies operating under the production sharing agreements,” the minister said. “Most of SOCAR’s revenues accounts for domestic market revenues.”
“Therefore, the decline in oil prices does not affect this,” Sharifov added. “As for the companies operating under production-sharing agreements, of course, their tax payments may accordingly reduce due to the decrease in oil prices. However, the situation is quite normal because the decline in this income is at the level of 1-1.3 per cent of revenues which are projected in the state budget.”
The minister stressed that the forecast indicators of the tax structures for two months of this year have been overfulfilled.
“At the same time, the customs bodies’ revenues have also been overfulfilled,” Sharifov said.
The realized revenues amount to four million manats ($2.3 million). On the other hand, the transfer from SOCAR plays an important role in the budget formation. This transfer to the state budget is being ensured. That is, the current state budget has been insured against short-term foreign shocks and no great impact will be observed.
In accordance with the president’s instructions, work on cost optimization is underway. Moreover, in connection with coronavirus in the world, the number of certain international events and some business trips is also expected to be reduced in Azerbaijan. These savings will also be used effectively. There are enough resources to implement the state budget.
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