Revenues from income tax on Azerbaijan's oil sector increase by 10%

In 2020, the oil sector of Azerbaijan paid AZN 797.1 million to the state budget against the forecast of AZN 727.7 million in income tax. This is AZN 69.4 million (9.5%) more and AZN 299.6 million (27.3%) less than in 2019, Report informs, citing the draft law of the Republic of Azerbaijan "On the implementation of the state budget for 2020."

24.3% or AZN 193.4 million of income tax revenues from the oil sector was paid by the State Oil Company of Azerbaijan (SOCAR), 75.5% or AZN 603.7 million by oil and gas production contractors.

The increase in income tax on Production Sharing Agreements compared to the approved forecast for 2020 is because the export price of crude oil exceeded the figure accepted by the state budget by $8.7.

Compared to 2019, the state budget received AZN 227.3 million less on the profit tax of contractors on the distribution of production in the oil and gas sector, and AZN 72.4 million less on SOCAR. The decrease is due to the decline in oil volumes in 2020 under the OPEC + agreement in 2020 compared to 2019, as well as due to the coronavirus (COVID-19) pandemic and lower global oil prices in the world market.