Azerbaijan.US
Azerbaijan is increasing excise duties on the import of used passenger cars under amendments to the Tax Code approved by President Ilham Aliyev. The new rules will apply to vehicles older than seven years and are expected to affect both import costs and domestic market prices.
Under the revised framework, a higher excise coefficient will be applied to imported passenger cars whose year of manufacture exceeds seven years. For vehicles with gasoline engines, the calculated excise amount will be multiplied by a coefficient of 1.5, while diesel-powered cars will face a higher coefficient of 2.
As before, excise duties are calculated based on engine displacement and apply to both gasoline and diesel vehicles. Industry experts note that the mechanism effectively functions as an environmental charge, as the excise burden increases in line with engine size.
For passenger cars with engine displacement of up to 2.5 liters, excise rates remain relatively stable. However, vehicles with larger engines are subject to significantly higher charges. For example, a passenger car with a 4.5-liter engine may face excise duties of approximately 20,000 manats.
Automotive market expert Eldeniz Jafarov says the higher excise rates will raise import costs, which is likely to translate into higher retail prices. According to him, the impact will not be limited to imported vehicles, as prices for used cars already on the domestic market are also expected to rise due to changes in import valuation.
Jafarov noted that Azerbaijan’s secondary car market has recently shown signs of stagnation, but higher excise duties on older imported vehicles could push prices upward across the board. “Any increase in import-related costs inevitably affects the broader market,” he said.
Currently, imported passenger cars older than seven years are subject to lower coefficients – 1.2 for gasoline engines and 1.5 for diesel engines. These rates will increase once the amended rules come into force.
