Economic analysis of Azerbaijan tax system

Tax is the most important source of income by making transfer payments and carrying out infrastructure and superstructure studies in order to ensure a balanced income distribution within the country, and with these revenues, it contributes to many needs of states in areas such as health, education, legal and security services. At each stage of social development, the state has its own forms of tax policy and functions. The state should regulate the tax system in a way that benefits all members of the society by creating a positive impact on both the economic and social sphere of life. At the same time, while taxes play an important role in budget revenues, they also fulfill a stimulating and regulatory function. Changes in tax rates can strengthen or weaken the economic activity of the state through the introduction of new forms of taxation. In this context, taxes are a system that helps to create an optimal balance between individual and social interests, which is the most important tool for the redistribution of national income in modern times. The universe of the research is the Azerbaijani tax system. The tax system in Azerbaijan includes four development processes, namely, taxes at the end of the XIX century, at the beginning of the XX century, taxes in the time of the Azerbaijan Democratic Republic, taxes under the Soviet rule and after the independence period of Azerbaijan. Although the disintegration of the Soviet Union in 1991 and the declaration of the independence of Azerbaijan was an important step in the history of Azerbaijan, the first years of the transition from the socialist economy to the capitalist economy brought a difficult and painful process for the country's economy. On the other hand, the deterioration of political stability with Armenia and the occupation of 20% of the country's lands worsened the economic situation and caused the social-economic and demographic structure to deteriorate. In the period of 1991-1992, the establishment of the modern tax system in the country, fundamental economic changes and the transition to a market economy began at the same time. While some researches related to the Azerbaijan tax system have been conducted, the economic analysis of the tax system, its share on economic growth, national income and employment have not been investigated. This research is an important resource for the development of the tax system in the future and to increase its share in the economy. The main purpose of the study is to examine the Azerbaijani tax system, determine the nature of the changing tax rates over the years, determine its effect on economic growth and national income, and reveal its current situation. Although the qualitative method is mainly used in the study, since statistics and numerical data are also used in some parts of the thesis, quantitative method will be used from time to time. In the analysis of data / document widely used in the research, Azerbaijan tax system will be examined, and comparative analysis will be made by collecting statistical data and it will be revealed how much this change affects the economic growth. Keywords: Azerbaijan Economy, Azerbaijan Tax System, Tax Rates, Economic Growth