IMPACTS OF COVID-19 ON TAX REVENUES AND CHANGES IN TAX POLICY IN AZERBAIJAN

Abstract

The state's tax collection capacity is falling due to the economic downturn, and the pandemic's negative financial repercussions are reflected in government revenues. Among the essential features that demonstrate the study's importance are measuring the influence of taxation on the state in both pandemics and similar global crises, examining the state's actions, and anticipating the post-pandemic condition. The study aims to investigate tax policy's activities during the pandemic, assess the efficiency of tax incentives using worldwide data, and identify the state's response in times of crisis. The effects of Covid-19 on tax revenue and changes in tax policy in Azerbaijan will be discussed in this article. Because it is written in an academic style, readers will quickly understand the essay. The jargon and terms used are mainly from economics. The Covid-19 epidemic has significantly impacted human health, mobility, spending, trade, employment, production, and tax revenues. The loss in economic activity, on the one hand, and the tax reductions implemented to mitigate the consequences of the pandemic, as well as the elongation of the tax return and payment periods, resulted in considerable reductions in state tax collections. It is critical for Azerbaijan, where indirect taxes constitute the majority that the measures used to combat the epidemic are mostly spending-restrictive. The scientific works of numerous local and foreign writers reflect examining the epidemic period of state tax policy in Azerbaijan. Examples include Kalbiyev YA, Garayev IA, Bulut C., Suleymanov E., Allahverdiyev D. I., Shamil A. F., Rasul S. F., Kocherbaeva AA, Koshoev Ch. M., Manushin D. V., Rasulev AF, Voronin SA, and others. This study aims to learn more about the effects of Covid-19 on tax revenues and policy changes in Azerbaijan. Concerns persist that the Covid-19 outbreak, which poses a public health hazard, would trigger a global economic crisis. Efforts to prevent the virus's spread through social distancing measures harm economic activity and revenues, reflecting tax revenues. On the one hand, the decrease in Azerbaijan's economic activities resulted in significant reductions in the state's tax revenues; on the other hand, the tax reductions implemented to mitigate the effects of the epidemic, as well as the extension of the tax return and payment periods, resulting in a temporary decrease in tax revenues. The epidemic's economic costs can be reduced by temporarily suspending tax collections. Expansionary fiscal policy measures, which lessen the tax burden on businesses while also directly supporting the enterprises and persons most impacted by the epidemic, aid in maintaining investment levels and overcoming economic difficulties. Furthermore, the extension of tax returns and payment periods for individuals and enterprises badly affected by the epidemic gives additional liquidity and lowers company failures. This article examines Covid-19 and its implications on tax receipts and changes in Azerbaijan's tax policy. In addition, the study examines specific vital procedures and policies to adopt to maximize Covid-19's favorable effects on tax collections and tax policy. The study's focus is on the state's tax policy in the case of a pandemic and the system of steps implemented to strengthen financial security in this area. The dissertation's focus is on the design of budget expenditures related to the activities and maintenance of education, medicine, social safety, social security, youth, sports, and other socio-cultural organizations in state tax functions. The study examined the tax policy enacted during the coronavirus epidemic using normative-legal actions, specialized literature, and directions. The ideology of the implemented tax policy, detailed systematic approach, structural-functional analysis, economic theory, social, economic, strategic, and financial management, management decision-making theory, and other content from the scientific-theoretical foundation of the study. Several themes were addressed, including morphological analysis and synthesis of tax policy, multi-criteria decision-making methodologies, and expert assessment. The data on the consequences of tax policy measures during the study in the local database is inadequate. Despite the strategic importance of tax policy in Azerbaijan during the coronavirus pandemic, professional perspectives and scientific studies based on analytical analysis are scarce. Each of the proposals and theoretical developments presented here will aid in analyzing tax revenues in Azerbaijan following Covid-19 and the implementation of specific measures to boost them. An examination of the influence of the Azerbaijani entity on tax revenues during the epidemic and changes in tax policy was conducted based on the study's key provisions, recommendations, and findings. It can be utilized to improve Azerbaijan's and the region's social development by assessing changes in tax policy. The ideology of the implemented tax policy, detailed systematic approach, structural-functional analysis, economic theory, social, economic, strategic, and financial management, management decision-making theory, and other content from the scientific-theoretical foundation of the study. Several themes were addressed, including morphological analysis and synthesis of tax policy, multi-criteria decision-making methodologies, and expert assessment. Keywords: budget, anti-crisis, state, pandemic, tax.