Upcoming amendments to Azerbaijan’s Tax Code could trigger an increase in consumer prices – including food, clothing, and other everyday goods – according to economist Gunay Huseynova, who spoke to Metbuat.az. Huseynova explained that while not all tax changes would directly affect citizens, a potential rise in the VAT rate to 20% could lead to broad-based inflation:
“Excise taxes apply mainly to alcohol and tobacco, so not everyone will feel their impact. But if VAT increases to 20%, prices for food and non-food items – including meat, dairy, oil, and clothing – will inevitably rise,” she said.
The economist added that simultaneous increases in income and profit taxes could push companies to offset higher costs through consumer prices:
“If both VAT and income taxes are applied at the same time, prices could rise by at least 8-10%. That’s a conservative estimate – in some years, food prices have jumped by as much as 30%,” Huseynova noted.
She emphasized that the first to be affected would be essential goods and basic food products, which account for the bulk of household spending. Huseynova urged the government to introduce the new measures gradually to minimize the impact on living standards.
