Comprehensive analysis of shadow economy countermeasures and taxation of hidden income in the agricultural sector of the Republic of Azerbaijan
Abstract
The study aimed to identify the main causes of the shadow economy in the agricultural sector of Azerbaijan, in particular the factors contributing to informal employment, and to assess the effectiveness of measures aimed at reducing it. The study conducted a comprehensive analysis of countermeasures to the shadow economy and taxation of hidden incomes in the agricultural sector of the Republic of Azerbaijan. The methodology of the study was based on the analysis of statistical data, in particular, reports of the International Monetary Fund, the World Bank and the State Statistical Committee of Azerbaijan, as well as on a comparative analysis with the data of neighbouring countries: Georgia, Armenia, Turkey, Uzbekistan. Key findings indicated that around 40% of agricultural workers are employed in the informal sector, resulting in tax revenue losses of over 1 billion USD per year, which significantly undermines the financial stability of the state. The study also determined that the current tax policy does not encourage the formalisation of employment, and the lack of access to finance limits the opportunities for legal business development. The findings suggested the need for comprehensive reforms in the tax system, including simplification of taxation procedures, improved tax enforcement, and creation of incentives for shadow workers to move to the legal sector. The implementation of these measures can significantly improve the economic situation in agriculture, ensure fair conditions for all market participants and guarantee the social rights of workers, which will contribute to the stability and development of the agricultural sector
Keywords
agriculture; agribusiness; finance; corruption; anti-corruption mechanisms
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