Azerbaijan's non-oil and non-gas tax revenues rise by 13.1%: Tax revenue is 1.27 billion manat above target

Azerbaijan reports a 13.1% increase in tax revenue from the non-oil and gas sector. From January through October, 11.78 billion manat—approximately 6.2 billion euros—flowed into the budget from this sector, according to a report by the State Tax Service on November 5. This represents an increase of 1.36 billion manat compared to the same period last year.

In total, the tax service collected 16.07 billion manat, up from 14.38 billion manat in the same period last year. That represents an increase of 11.7%. The tax authority exceeded its ten-month target by 1.27 billion manat. The non-oil and gas sector accounted for 73.3% of all taxes.

Tax Revenue in Azerbaijan: Oil and Gas Account for a Good Quarter

Oil and gas companies paid 4.29 billion manat—an 8.1% increase from a year earlier. The Tax Service’s annual target is 16.91 billion manat, of which approximately 95% had been met by the end of October. There is still a shortfall of 844.8 million manat for November and December. These figures come from the financial portal Banker.az, which analyzed data from the tax service.

The draft budget for 2027 continues this trend. Parliament has been debating it since early November. The Tax Service is expected to contribute 18.4 billion manat, 9% more than in the 2026 plan. State budget revenues are set to rise by 1.7% to 39.2 billion manat. Expenditures are also set to grow by 1.7% to 42.4 billion manat. The draft budget assumes an oil price of $65 per barrel. The transfer from the State Oil Fund will decrease by 935 million manat to 11.9 billion manat.

The non-oil and gas economy is growing by 2.6%

Behind the tax figures lies an economy that is split in two. Economic output grew by 1.5% from January to September, while the non-oil and gas sector grew by 2.6%. Deputy Minister of Economy Anar Akhundov cited these figures in Parliament on November 6. According to him, the non-oil sector accounts for more than 70% of economic output.

The manufacturing industry outside the oil sector grew by 6.6%. Transportation and warehousing grew by 10%, and information and communications by 11.1%. Private investment in the non-oil sector rose by 20.7%. Akhundov said: “The focus of our economic policy in the coming period will be on growth driven by exports and based on private investment” (translated from English). For the full year, the ministry expects growth of 1.7% overall and 3.1% excluding oil and gas.

Exports excluding oil and gas rose by 20.5% to $3.2 billion in the first nine months. This figure does not include gold transactions by the Oil Fund. Elvin Jamalov, chief of staff at the Ministry of Economy, made this statement in Parliament on November 4. The trade surplus for the first nine months is nevertheless driven by oil and gas. The central bank is keeping the key interest rate at 6.5%.

For German exporters, demand is shifting. Suppliers of technology for industry, logistics, and telecommunications are seeing growth in these sectors ranging from 6.6% to 11.1%. The government remains a major client, but its budget will grow by only 1.7% in 2027. The official exchange rate of 1.70 manat per U.S. dollar makes pricing predictable. Investors should keep an eye on the oil price: The 2027 budget is based on $65 per barrel.

Sources: State Tax Service of Azerbaijan (AZ), Ministry of Economy of Azerbaijan (EN), Trend (EN), Report (AZ), Banker.az (AZ)

SK, Frankfurt