In Baku, at a forum titled "A Look into the Future of the Tax System," Azerbaijan’s top economic leaders, Samir Sharifov and Mikayil Jabbarov, painted a picture of a nation navigating global uncertainties with fiscal prudence, sweeping tax reforms, private sector empowerment, ICT innovation, and export-oriented growth, while emphasizing trust, institutional resilience, and a balanced, sustainable economic strategy that positions Azerbaijan among the world’s fiscally stable countries.

On March 5, Samir Sharifov, the Deputy Prime Minister of Azerbaijan, stated at the forum titled "A Look into the Future of the Tax System: A New Governance Model and Data-Driven Decisions" in Baku that Azerbaijan remains among the few countries that have managed to maintain balance in fiscal policy. He emphasized that the recent dynamics in the global economy demonstrate that macroeconomic stability is achieved through consistent policies, prudent fiscal management, and sound institutional decisions. "While many countries are facing rising budget deficits, debt pressures, and inflationary risks, Azerbaijan is among the few countries that has succeeded in maintaining balance in its fiscal policy," Sharifov stated.

Sharifov noted that global economic uncertainty, geopolitical tensions, fluctuations in energy markets, and instability in financial flows have made economic decision-making more complex than in previous periods. In such conditions, he emphasized that governments must focus not on short-term reactions but on creating a sustainable and adaptive economic governance system. According to him, Azerbaijan prioritizes this approach. He added that the tax system plays a key role in maintaining macroeconomic stability, ensuring fiscal sustainability, and regulating economic processes in a balanced manner. From this perspective, he stressed the importance of evaluating the future of the tax system at the macro level and considering it as an integral part of the country’s broader economic strategy.

He also addressed the role of state oversight in the economy, emphasizing that the government does not intend to eliminate supervisory functions but rather transform them into a more flexible and effective system. "Economic development is possible not only through administrative regulation, but also through a system of relationships based on trust," he stated, adding that predictable policies, clear rules, and a stable approach are essential for a favorable business environment. According to him, reducing the shadow economy requires a systemic and institutional approach. He also stressed the importance of setting the right priorities in fiscal policy, improving the efficiency of public spending, and strengthening non-oil revenue sources. In his view, tax policy should not merely serve to maximize fiscal revenues but should also shape economic behavior, influence investment decisions, and maintain social balance. "Taxes and mandatory social contributions should not suppress economic activity; on the contrary, they are intended to stimulate it," Sharifov emphasized.

The minister further noted that proposals are currently being developed to improve Azerbaijan’s business climate. He stated that a special working group has been established to address reforms in this area, with its sub-structures preparing recommendations to remove obstacles to entrepreneurial activity and enhance business conditions. As part of this process, the government has already begun collecting proposals from entrepreneurs related to the tax system. According to him, the existing institutional framework demonstrates the government’s systematic and consistent approach to improving the business environment. He emphasized that effective coordination between fiscal, tax, social, and financial policies plays a decisive role in ensuring the success and sustainability of economic reforms.

Sharifov also stated that Azerbaijan has strengthened its financial and institutional capacity to withstand external shocks. According to him, the restoration of the country’s territorial integrity has created new geopolitical and economic realities in the region. He emphasized that reforms and development programs implemented in recent years have ensured macroeconomic stability and fiscal sustainability, improved fiscal administration, strengthened the country’s financial position, and increased its investment attractiveness. "In short, the financial-institutional base has been consolidated for resilience to shocks and for quality economic growth," Sharifov stated. At the same time, he noted that growing uncertainty in the global economy, fragmentation, trade protectionism, and rapid technological and energy transformation present new challenges for future socioeconomic development. He added that assessing the role of the tax system in strengthening the country’s institutional capacity and governance practices in response to these challenges would be one of the key issues discussed at the forum.

During the forum, Mikayil Jabbarov, the Minister of Economy of Azerbaijan, stated that reforms of the tax system continue as an essential element of the country’s economic policy. He explained that the changes implemented in recent years have focused on improving the efficiency of tax administration, increasing transparency, and strengthening trust between taxpayers and the state. "Tax system reforms are consistent in nature, and this process has entered a more intensive phase since the end of 2017," Jabbarov stated, noting that the measures taken have contributed to improving the business environment and legalizing economic activity. He highlighted the wage reform introduced in the non-oil private sector on January 1, 2019, as one of the most significant steps. According to the minister, the reform enhanced transparency in labor relations and reduced informal employment, and its implementation was completed earlier this year. He emphasized that strengthening taxpayers’ confidence in the state remains one of the primary objectives of these reforms.

Jabbarov also highlighted the growing role of the non-oil and gas sector within Azerbaijan’s economic diversification strategy. According to him, between 2021 and 2025 the sector recorded an average annual real GDP growth rate of 5.9%, making it one of the key drivers of economic development. The minister noted the significant contribution of the private sector to this progress and stated that government support continues through measures such as tax and customs incentives. He added that the private sector accounted for 76% of tax revenues in the non-oil and gas sphere last year. In addition, investments in fixed capital in the private non-oil and gas sector increased by 11.1% in 2025, while foreign investment rose by 24%, and investments in non-oil industry grew by 26%.

The minister also announced that the Economy Ministry has prepared a new document outlining modern approaches aimed at ensuring sustainable socioeconomic development and strengthening an export-oriented economy. According to Jabbarov, the document предусматривает increased accountability of sectoral government agencies for development indicators and includes analytical assessments of the potential impact of monetary and fiscal decisions on socioeconomic development, as well as possible negative consequences. He noted that the draft was discussed at a meeting of the Economic Council of Azerbaijan the previous week. The document also proposes measures to expand business access to credit and introduce innovative mechanisms to support exports. Jabbarov added that the country plans to expand preferential trade regimes in order to increase non-oil and gas exports to new markets while strengthening positions in existing ones. In this context, Azerbaijan intends to make broader use of the opportunities provided by the Alat Free Economic Zone and to further develop industrial parks and infrastructure in the coming years.

Jabbarov emphasized that despite complex geopolitical and economic conditions in the region, Azerbaijan continues to provide a stable and favorable business environment for investors. He pointed to the country’s strategic geographic location, developed transport and logistics infrastructure, economic zones, tax and customs incentives, and public-private partnership mechanisms as factors creating additional opportunities for investment. "Joint investment funds established with various countries give investors the chance to participate in sustainable projects, as well as partnership opportunities that attract technology, investment, and expertise," he stated. The minister also noted that Azerbaijan’s sovereign credit rating has improved, with Fitch Ratings and Moody’s upgrading the country’s rating to investment grade while assessing its outlook as stable and positive.

The minister further stated that Azerbaijan plans to establish a more competitive tax environment for the information and communication technologies sector and startups. According to him, the government aims to introduce a more flexible tax policy for ICT companies, startups, and highly qualified specialists in order to support the development of an innovation-oriented economy. "Increasing tax incentives aimed at the use of artificial intelligence technologies has been identified as one of the main priorities," Jabbarov emphasized. He added that the measures being implemented are intended to support Azerbaijan’s transition to a high-technology economy. In this regard, the country has already launched a supercomputer center, continues to implement major digitalization projects, and is working to strengthen the knowledge and skills of human capital.