Date:31/07/12

Ministry of Taxes to switch to non-cash payments

The Ministry of Taxes of Azerbaijan has developed a bill on the promotion of cashless payments, which is submitted to the Cabinet of Ministers to agree with the relevant state agencies.

The bill stipulates incentives to encourage non-cash payments, particularly the introduction of preferential tax rates. It is expected to introduce benefits for users of POS-terminals. A maximum amount of cash that will be used in one operation will be limited, that is a certain limit will be set. Financial sanctions will be applied for violation.

Cashless payments are predominant due to their obvious advantages to the calculations in the cash form. With the application of non-cash payments in practice in Azerbaijan, the credit resources of the banking system will increase and credit relationships will develop even more. Cashless payments will reduce distribution in the form of additional costs for printing, storage, transportation, and the conversion of notes and coins.

According to the National bank of Azerbaijan, the population owns 94.6 percent of broad money, but the situation is opposite for example in Western Europe.

About 90 percent of the cash flow is accounted for non-cash payment and only 10 percent - cash. People in the advanced countries rarely carry a cash payment and payment is carried out by plastic cards almost everywhere.

Azerbaijan needs to strengthen domestic banking activities to promote cashless payments to eradicate conservative thought among Azerbaijani citizens preferring to carry cash. . Moreover, it is important to improve the technical, organizational and personnel readiness of the Azerbaijani banking system for the full implementation of cashless payments for individuals.

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