Proposed amendments to Azerbaijan’s Tax Code introduce new excise rates on imported vehicles, significantly increasing the tax burden on cars manufactured more than seven years ago.
According to the amendments, the excise rate for gasoline cars with engines up to 2,000 cubic centimeters will be recalculated using a coefficient of 1.5 starting from next year. For diesel-powered vehicles, this coefficient will be doubled, reflecting a sharper tax increase.
Experts Warn of Sharp Cost Rise
Economist Rashad Hasanov told Xəzər Xəbər that the draft law is not only about new rates but also about the timing of implementation, which is critical for both consumers and businesses.
“Any such fiscal adjustment must include a transition period. Companies and individuals need time to adapt to the new excise structure,” he said.
Həsənov noted that raising excise duties is part of a broader government effort to discourage imports of older, more polluting cars, but the process must be implemented fairly and transparently.
Calculation and Legal Transition
Under the proposed changes, excise taxes will be calculated at the time of customs clearance, not on the date the vehicle was purchased abroad. This means the import date determines the applicable tax rate.
Experts argue that a transitional mechanism should be introduced.
“If a person buys and officially documents a car abroad before the law comes into force, but imports it into the country after the effective date, the previous excise rules should still apply,” analysts suggest.
Otherwise, they warn, citizens who purchased vehicles in advance could face unexpected financial losses due to the new taxation rules.
Background and Precedents
A similar restriction was implemented several years ago, when Azerbaijan limited the import of vehicles older than ten years. At that time, the government allowed vehicles purchased before the regulation to enter the country under the old taxation scheme.
Experts believe a similar fair transition period should be adopted this time as well, to protect both private buyers and import businesses.
“People make financial decisions based on current laws and conditions. Changing the rules overnight undermines confidence and affects the entire market,” said Hasanov.
The new excise rates are expected to raise car prices sharply, especially for used imports, while encouraging the purchase of newer and more environmentally friendly vehicles in the domestic market.
