The purpose of the study is to determine the priorities of tax policy in the sectors of economy as part of the state reforms in Azerbaijan at the present stage and to identify its impact on economic development.
In the process of writing the article, the authors referred to the general provisions of dialectical cognitive teaching as a research methodology. Both general-scientific, specific and area methods (systematic analysis, logical, logical conclusions, analysis and synthesis, relationship between general and specific, generalization, statistical analysis, etc.) have been used in the research.
Findings of the research is to use the experience of developed countries in the tax policy to be implemented in the future by the Republic of Azerbaijan, to develop a flexible tax system taking into account local specifics; in order to increase tax revenues, tax gaps should be the center of attention (tax gap is the difference between taxes being calculated and paid to the state budget and taxes that should actually be calculated and paid to the state budget); a system of effective measures against tax evasion should be developed and implemented. In particular, some works should be continued in the direction of service, public-catering and trade, optimization of tax rates. International experience shows that not all tax rates applied in our country have effective impact on economic development. In order to create a more effective investment climate in the non-oil sector of economy, a system of measures should be developed to reduce the tax burden and increase tax privileges.
Limitations of the study are the challenges regarding the impact of amendments and newly added provisions to the tax legislation and administration on tax revenues by the sectors of economy.
The practical implications of the research is to improve tax policy as a part of state reforms.
The proposals and conclusions as a result of originality and scientific novelty of the research are evaluated as a new approach to improving the legislation and administration in the tax system.
Key words: tax policy, tax legislation and administration, statistical analysis, tax revenues, tax evasion