ERC organized Round Table meeting on “The economic activities of NGOs and their tax payments”

Baku November 07, 2012

ERC organized Round Table meeting on “The economic activities of NGOs and their tax payments” within the framework of “ Support to Civil Society in Azerbaijan” project funded by German Marshall Fund of the United States of America and Open Society Institute-Budapest office on November 06, 2012. The meeting was conducted at Park Inn Hotel with invitees from local and international civil society institutes, state agencies and parliamentarians. The main focus of this meeting was about converting revenues stemming from economic activities and exchange transactions (commercial activities) of NGOs into taxes and other compulsory payments. Given this, the presentations embodying current situation in Azerbaijan as well as sharing experiences from Turkey were conducted at the meeting.
Gubad Ibadoglu, member of ERC Board of Management delivered opening remarks and provided attendees about broad information of the project. He noted that there were up to 200 meetings arranged with NGOs in various regions of Azerbaijan and “ Civil Society in Azerbaijan: National Agenda for Changes” document was prepared based on proposals and feedbacks from them. G.Ibadoglu stated that this document was submitted to relevant agencies and recommendations on economic activities of NGOs and their tax payments were presented to the Ministry of Tax. Subsequently, ERC received feedbacks from different state bodies.
Mehriban Rahimli, the consultant of German Marshall Fund of the USA provided information about the programs of this Fund, its priorities and mission in Azerbaijan as well. Furthermore, she emphasized the Fund prefers mainly to those projects that foster regional cooperation among non-governmental organization from Black Sea countries. She desired building much closer cooperation between civil societies from Turkey and Azerbaijan.
Afterwards, Altay Cafarov, member of Chamber of Audit, an independent audit delivered presentation on “The economic activities of local NGOs and their compulsory social insurance payments”. Altay Cafarov gave comprehensive information on some adopted normative legal acts in terms of NGO’s economic, commercial and non-commercial activities, including involving their revenues from exchange transactions and non-exchange transactions into taxes as well as payments of NGOs for state budget and extra-budgetary funds, exemptions and concessions. In addition, the presentation covered also indirect state aids like tax exemptions from their revenues obtained as NGOs’ economic activities and property deals. Besides, he touched upon charity activities of donors, business organizations and their associations, analysis of current legislation in Azerbaijan on grants and contribution assistance, including studying of European and Turkey experience in this field, applying promotion and mitigation tax mechanism as well. At the same time, proposals were mentioned in direction of improvement articles related to NGO commercial and non-commercial activities in Tax Code.
The final presentation was made by Hayati Shahin, the representative of Turkey Third Sector Foundation, certified public accountant on the topic of “ Taxation within foundations and public unions of Turkish foundations and improvement of this system”. H. Shahin informed about economic and non-profit activities of Turkey NGOs and concurrently mechanisms involving funds directed by donors, business organizations towards charity works. During his presentation he brought samples from experiences of EU countries and proposed the importance of making relevant improvements to tax system in both of Azerbaijan and Turkey.
Nuiyaz Shukurov, the representative from the Ministry of Finance, head office for tax policy and strategic studies, talked about NGOs’ quantity of payments for the budget and also concessions on conformity with current legislation. He noted that his entity responds to all surveys timely directed to the Ministry of Tax and provides methodical assistances to both commercial and non-commercial organizations. The representative from Parliament, Rovshan Muradov underlined that there are plenty of surveys received about tax and other form of payments and all obtained surveys are responded timely and comprehensively. He also mentioned that there are sufficient opportunities to improve Tax Code adopted in 2001. Therefore, Parliament is ready to evaluate proposals of NGOs in this direction.
Cavid Gadirov, the representative of International Center for Non-commercial Legal on CIS countries talked about the payments in terms of contributions in Azerbaijan.
Rana Safaraliyeva, executive director of Transparency Azerbaijan, Elchin Abdullayev, head of Democratic Institutions and Human Rights public union, Ayyub Huseynov, chairman of Independent Consumers Union, Ahmad Abbasbayli, the chairman of Development of Society and Citizen Affairs Public union, including Sevgim Rahmanov, the chairman of Merchants and Producers Public Union were among civil society representatives. They stated concerns over despite the fact that NGOs freed from Value Added Taxes ( VAT) sometimes they were asked VAT payments in exchange of works and services.
The Round Table meeting pursued with discussions.

PR DEPARTMENT OF ERC