Center for Economic and Social Development (CESD) developed policy recommendations on improving tax system in Azerbaijan. The CESD paper studied the tax system of Azerbaijan and list policy recommendations how improve the system. Obstacles and problems are also stated.

CESD suggest decreasing some tax rates in Azerbaijan and applying new tax rate for e-trade in order to support e-government in Azerbaijan. The center also recommends applying interval VAT rates in the country.

The CESD suggest to have a full risk analysis of the Tax Code should be conducted in order to identify which specific provisions create unnecessary and unjustifiable space for corruption. Particular attention should be paid to identifying provisions which may be subject to multiple interpretations, and to the provisions that describe when and how the tax authorities may use transfer pricing methods to estimate companies’ tax liabilities. The risk analysis should be independent, and conducted for example by an international tax consultancy.