In Azerbaijan postponed the entry into force of the law on compulsory tax of 20% on transfer of foreign currency outside the country. According to the Agency “AzerTAj”, President Ilham Aliyev refused to sign the bill and returned it to the Parliament — Milli Majlis.
The decision not to give effect to this law was made taking into account “numerous appeals” investors and entrepreneurs, said the Agency in the office of assistant to the President of Azerbaijan on economic reforms.
The bill, which also provided partial control over the movement of capital and the compulsory insurance of Bank deposits, was adopted at an extraordinary session of Parliament on January 19. 20-cent fee proposed to introduce foreign exchange transactions for the purchase of real estate securities and direct investment abroad. It was proposed to charge the same amount and on remittances, the amount of which during the year would exceed $50 thousand.
According to the analyst of the Baku Center for support for economic initiatives Samir Aliyev, the tightening of exchange control could create complexity for foreign investors. He told Bloomberg that such a move could create problems for major companies such as BP, which in consortium with Statoil, Exxon and Chevron have invested since 1994 Goa in the Azerbaijani energy sector more than $50 billion.
Minister of Finance Samir Sharifov in the past month said that the bill will not apply to bona fide investors and citizens, and will be applied only if the source currency will be “non-obvious”.
The rejection of the introduction of the exchange fee reflects the weakening pressure on the currency market of Azerbaijan, its national currency which last year had twice to devalue, writes Bloomberg. According to the Central Bank of the country, the Agency said, demand for dollars has fallen sharply, and in the currency auction on Wednesday was attended by only one Bank.
In December of last year Azerbaijan manats translated at a floating rate, paying for support more than half of foreign exchange reserves. The economy has suffered from declining energy prices and the recession in Russia, which is a major trading partner of Azerbaijan.