Government and institution measures in response to COVID-19.
Government and institution measures in response to COVID-19.
Return to homepage | Last updated: 04 May, 2020
To contain the spread of COVID-19, the authorities have introduced a special quarantine regime (until May 4, 2020). It includes border closures, required quarantine of returning citizens, prohibition of mass gatherings, restriction on domestic movements; closure of restaurants and some other public facilities, airports, and transportation hubs; social distancing, and disinfection of public spaces. The COVID-19 Operational Headquarters has been created under the Cabinet of Ministers, and working groups under the leadership of the Minister of Economy, Minister of Finance, Minister of Labor and Social Protection of the Population and Chairman of Central Bank of Azerbaijan have been tasked with developing specific measures in order to reduce the negative impact of the pandemic on the country's business environment.
Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.
In order to reduce the social insurance burden, it is proposed to change the rates of mandatory social insurance contributions for persons deriving income from non-employment activities:
For insured persons deriving income from non-employment activities:
Agriculture sector
It is also planned to replace the submission of social insurance reports by landowners with a fixed receipt.
Attorneys, freelance accountant and auditors
Payment of a part of the salary of employees and financial support to individual (micro) entrepreneurs in activity areas affected by the pandemic
The following actions are among the measures implemented in order to support for economic growth and entrepreneurship during Coronavirus (COVID-19) pandemic:
State loan and guarantee in the support of the economy and businesses
Credit-guarantee support program for loans in the amount of 0.5 billion AZN (294.1 million USD) to be issued to businesses (including small and medium enterprises) operating in areas negatively affected by the pandemic envisaging the implementation of the following measures:
Additionally, allocation of additional funds to the Entrepreneurship Development Fund in the amount of 50 million AZN (29.4 million USD) is planned in April-May 2020.
The program will also support entrepreneurs with the existing loan portfolios who work in the coronavirus affected sectors. The government will subsidize 10% of the interest expenses of these loans for one year and for this purpose 1 billion AZN (588 million USD) were allocated.
Supportive measures proposed by the Central Bank of Azerbaijan
Measures covers broader directions, including matters related to the restructuring of business loans issued via assets of the state funds, the restructuring of mortgage loans issued to individuals via the country’s Mortgage and Credit Guarantee Fund as well as through support of participants of the insurance and capital markets.
Support of individuals and business entities
Private business entities, including individuals engaged in entrepreneurship will be provided with the opportunity to restructure loans (of satisfactory quality, and with interests subsidized by the state) issued to them till March 1, 2020, without deteriorating their quality.
Also, it’s envisioned to create possibility for restructuring business loans issued with the means of state funds and having satisfactory quality as of March 1, 2020. as well as the restructuring of mortgage loans issued with the means of Azerbaijan’s Mortgage and Credit Guarantee Fund in order to support individuals (not engaged in entrepreneurial activity).
Furthermore, in case of full or partial delay in business and consumer loans (principal or interest-bearing debt), credit organizations will be advised not to levy a fine, penalty and other payments from the borrowers and not worsen their' credit history until September 30, 2020.
Reducing the regulatory burden on banks, increasing lending opportunities and maintain financial sustainability
In order to stimulate non-cash payment services and reduce costs, given the decrease in economic activity and income of businesses and households, as well as the negative impact on indicators of the use of payment services till September 30, 2020
Support of participants of capital markets.
Baku Stock Exchange will not charge tariffs to issuers of corporate bond until January 1, 2021 and minimize the number of documents required for placing securities by the mass offer method.
Main sources of information
Legal: Farid İsayev – fisayev@kpmg.az
Tax: Rizvan Gubiyev – rgubiyev@kpmg.az