A member of Azerbaijan’s Milli Majlis (parliament) has proposed a major change to the country’s taxation system – exempting the minimum monthly wage from income tax altogether.
The proposal was discussed during a session of the Parliamentary Committee on Economic Policy, Industry, and Entrepreneurship, which reviewed upcoming amendments to the Tax Code of Azerbaijan. According to the draft, starting next year, monthly salaries up to 2,500 manats in the private sector will be taxed at a 3% rate.
MP and economist Vugar Bayramov, who announced the initiative on social media, argued that Azerbaijan should adopt the same tax exemption model for low-income earners that exists in many other countries.
“Given that in many states the minimum wage is not subject to income tax, introducing such a practice in Azerbaijan would be beneficial. Exempting the minimum wage from taxation in both the public and private sectors would strengthen citizens’ social protection. In this case, the non-taxable income threshold could be set at 400 manats instead of the current 200,” Bayramov explained.
He added that the reform would raise take-home pay for lower-income workers, effectively increasing disposable income without additional government spending.
“If the non-taxable amount is increased to 400 manats, citizens earning up to 2,500 manats per month would see a direct increase in their net wages,” the MP noted.
The proposed measure is part of a broader debate over Azerbaijan’s fiscal policy, as the government prepares to introduce new income tax rates in 2026, replacing a five-year tax relief program for employees in the non-oil private sector.
