Azerbaijani butchers exempted from VAT for 4 years – why?

The sale of meat in Azerbaijan will be exempt from value added tax (VAT) for four years.

VAT in Azerbaijan is 18% of the cost of goods sold (for sellers).  This is one of the amendments to the tax legislation that was planned last year.

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The cancellation of VAT on the sale of meat was reported by the new Minister of Economy Michael Jabbarov.  Previously, this rule applied only to chicken.

In theory, the abolition of VAT should reduce the cost of goods.  

In theory, sellers could lower prices in order to sell more meat.  But it is entirely possible that they would prefer to leave prices the same, and then the only thing that will change is the income of sellers.

Economist Vugar Bayramli believes that meat prices will not change.  However, meat production may become a more profitable business, and this industry will develop.

Now 75% of the demand for meat and meat products in Azerbaijan is provided by local production and 25% by import.

 A kilogram of beef in Baku costs from 10 to 15 manat ($6-8).

 A kilogram of lamb – about 12 manat ($7).