Minister: Income tax rate in Azerbaijan is one of the lowest in the world

Azerbaijan's income tax rate is one of the lowest in the world.

As reported by BAKU.WS with reference to Report, this was stated by the Minister of Finance Sahil Babayev during the discussion of the state budget draft for 2026 by the parliamentary committee on economic policy, industry and entrepreneurship.

He reminded that from 2026, income (of working citizens) up to 2,500 manats per month will be subject to an income tax of only 3%: "At the same time, we have regulated the overall fiscal burden. In Azerbaijan, the total fiscal burden previously reached 52-55%, and now it is 37%. We have established a condition not to exceed this level for all types of income," he noted.

The Minister emphasized that according to government plans, the income tax rate will increase to 5% in 2026 and stabilize at 7% from 2027.

"Thus, from 2027, the income tax rate will be 7% on income up to 2.5 thousand manats per month, 10% - up to 8 thousand manats, and 14% - over 8 thousand manats. We believe that this creates a positive foundation and conditions for the development of the private sector, especially small and medium businesses, investments and infrastructure investments," added Sahil Babayev.

Note that since January 1, 2019, Azerbaijan has had 7-year income tax benefits for the non-oil private sector. These benefits expire at the end of 2025.