Azerbaijan Eyes Blockchain Use for Tax Purposes

Azerbaijan tax authorities will assess how blockchain technology could be used for different tax-related tasks, as revealed by the tax minister.

Azerbaijan’s Ministry of Taxes will explore the application of blockchain technology for various procedures, tax minister Mikayil Jabbarov said on Tuesday during a conference in Baku called “Taxes: Transparency: Development.”

He said that the distributed ledger technology would help tax authorities organize tasks at a higher level.

Jabbarov stated that the ministry’s current system of services has to go through significant changes to satisfy the taxpayers' needs.

“Each taxpayer must have access to any service at any time and from any place. The new technologies should ensure the targeting of public services, covert taxpayers’ contacts to the electronic format and provide an opportunity to achieve transparency,” the minister said.

According to Jabbarov, the Ministry of Taxes has been actively using information technologies for many years and will persist in this policy.

“Digitalization of tax administration has a cumulative effect. Technologies are the basis for increasing the level of voluntary compliance with tax legislation. [Technologies] serve to increase public confidence in the state, to increase the population's satisfaction, and to ensure economic transparency for all its subjects,” Jabbarov added.

The tax ministry is not the only government agency exploring blockchain. The head of the State Customs Committee of Azerbaijan, Aydin Aliyev, noted early in February that the technology might fit well in the country’s customs service.

“We know that the use of blocking technology is of great interest to the customs authorities of the US, UK, Singapore, Korea and Japan. It should be taken into account that the blockchain technology promises a number of advantages - optimization of costs and resources, as well as ensuring transparency, which is achieved through distributed databases and cryptographic solutions,” Aliyev noted.

Earlier, Azerbaijan organized a working group whose mission is to prepare a draft law "on the regulation of cryptocurrency trade.”

Last week, Kazakh President Nursultan Nazarbayev voiced his satisfaction with the way blockchain is implemented in his country for collecting value-added tax.