Azerbaijan: income-based tax model for taxi drivers to take effect in 2027

Baku, 6 November (AZERTAC) – A new income-based taxation model for taxi drivers is planned to be introduced in Azerbaijan from 2027. AZERTAC reports that Nijat Imanov, head of the main department of the State Tax Service, announced this at a meeting of the National Assembly's Committee on Economic Policy, Industry and Entrepreneurship.

At present, tax is paid through obtaining a distinguishing sign, and a fixed 18 manat tax is levied regardless of the driver's income. The new proposal envisages a fairer, income-based model. Through a mechanism of withholding tax at the payment source via operators, the administrative burden on people engaged in taxi activity will be removed.

The tax due to the state budget from income will be calculated at a rate of 1 percent. Drivers with lower turnover will pay less, while those with higher turnover will pay more within the 1 percent framework. According to calculations, the average tax amount will remain at around 18 manat, though in some cases tax rates will be lower than this figure.