Azerbaijan to raise private-sector income tax to 5% in 2027

From 2027, the income tax rate on wage employment in the non-oil-gas and non-state sector will rise from 3% to 5%, and this has been factored into state budget calculations. Modern.az reports that this was noted in the draft 2027 state budget, discussed today at a meeting of the Economic Policy, Industry and Entrepreneurship Committee of the Milli Majlis, Azerbaijan's parliament.

According to the document, personal income tax revenue to the budget is forecast to reach 3 billion 70 million manat next year. This is 690.7 million manat, or 29 percent, more than the 2026 forecast. Of this amount, 2 billion 758.3 million manat is expected to come from income tax on wages and 311.7 million manat from income tax on entrepreneurial and non-entrepreneurial activity.

Among the reasons for the growth, the source cites the higher tax rate, along with rising average wages and wage reforms in budget organisations.