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Another Blow for Georgian Auto Market – Azerbaijan Increases Excise Rates

Azerbaijan has increased the excise rates on imported cars, yachts for leisure and sports and other vessels, imported for this purpose, according to the draft amendments and additions to the Tax Code, discussed at a meeting of the parliamentary committee on economic policy Dec. 29.

According to the amendments, the share of excise tax in the cost of passenger cars with an engine capacity of up to 2,000 cubic centimeters has been set at 0.2 AZN per each cubic centimeter, up to 3,000 cubic centimeters – at 400 AZN (plus one AZN for each cubic centimeter with an engine capacity of 2,001- 3,000 cubic centimeters), up to 4,000 cubic centimeters – 1,900 AZN (plus four AZN per each cubic centimeter with an engine capacity of up to 3,001-4,000 cubic centimeters), up to 5,000 cubic centimeters – 5,900 AZN (plus eight AZN per cubic centimeter with an engine capacity of 4,000-5,000 cubic centimeters), 5,000 cubic centimeters – 13,900 AZN (plus ten AZN per each cubic centimeter with an engine capacity exceeding 4,000 cubic centimeters).

A car importer  “Auto market” says that  amendments adopted by  Azerbaijan’s Parliament will hurt their business. According to them, they heard this information at the  level of  rumors and if it’s  true, the vehicles exports from Georgia to Azerbaijan will reduce.

“Buy Auto” representative Misha  Davidov  notes that an increase in the excise tax on imported vehicles in Azerbaijan will have more or less influence on the Georgian market. He believes the tax rate increase will  hurt  private individuals who are engaged in the import of cars.

Another company “Usa Auto”  thinks  that the excise rate increase in Azerbaijan will not have  any impact on the Georgian market. He notes that for  a certain period export to Azerbaijan has reduced, and then rose again. “Any kind of vehicles are exported to   Azerbaijan, so the excise tax increase will not have any affect ,”-  they say in the company.

They inform that, in general, sales in Georgia have significantly reduced due to the low purchasing power of the population.