Taxation of the annual interest income paid by local banks and foreign bank branches in Azerbaijan on the deposits of individuals at the rate of 10% will not seriously impact the size of the deposit portfolio, Taleh Kazimov, Chairman of the Central Bank of Azerbaijan (CBA), said at the press conference, Report informs.

“According to the Tax Code, a concession was applied to deposit income for a period of 7 years, and this period has already ended. Taxation of deposit income is a requirement of the legislation,” Kazimov said.

He believes that the cancellation of the tax exemption does not pose any threat to the deposit portfolio:

“We believe that banks will reflect that cost in their deposit rates. This may affect the loan interest rates. We will be able to say this after our upcoming analysis.”