Economist Warns VAT on EVs Will Hurt Consumers, Not Help Production

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Azerbaijani economist and public figure Natig Jafarli sharply criticized the government’s decision to impose value-added tax (VAT) on electric vehicles, calling the move “a triumph of absurd logic” and “an insult to the public’s intelligence.”

Jafarli was responding to a recent statement by Shahin Baghirov, head of the State Customs Committee, who said VAT would now apply to electric cars and that the measure would “positively impact local electric vehicle production.”

Baghirov also claimed that public interest in EVs had fallen, citing a drop in imports – from 3,027 vehicles in 2024 to 1,700 in the first ten months of 2025.

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“According to this logic,” Jafarli said, “because fewer EVs are being imported, the government will raise prices by another 18 to 20 percent. And somehow that’s supposed to increase demand? If the goal is to promote clean, sustainable transport, you cut taxes – you don’t add them.”

The economist stressed that declining imports had nothing to do with a lack of public enthusiasm but rather with low purchasing power and poor charging infrastructure.

“They say VAT will stimulate domestic production. But let’s be honest – our country doesn’t even produce batteries for TV remotes, let alone electric cars,” Jafarli remarked.

“Such statements are just playing with people’s intelligence.”

He also renewed his long-standing call to dissolve the State Customs Committee as an independent agency, arguing that it damages economic efficiency.

“For 15 years we’ve been saying this: the Customs Committee should be merged into the Ministry of Finance or the Ministry of Economy. The militarized customs structure, copied from Russia, must be completely reformed,” he said.

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