Government consumption in Azerbaijan, at 38,3% of GDP, is lower than the average of European countries, but in line with other Commonwealth of Independent States (CIS) countries. Government revenues, however, are much higher due to the export of oil and gas, leading to budget surpluses (as high as 20% of GDP in 2009), which are tied to the price levels of those commodities. These non-tax revenues allow for generous state programs coupled with lower taxation levels than otherwise anticipated, and contribute to high levels of shadow economy (approximately 1/3 of the annual GDP), which is tolerated. Much of the oil revenues are invested through state sovereign wealth fund Oil Fund of Azerbaijan (SOFAZ) in order to maintain and increase their value and preserve them for the future. However,
transparency and accountability of the oil fund is under question, due to strong influence of politics onto economic life in general. Many of investment decisions of the fund are not considered lucrative. Although large scale privatization process has been implemented, the state still owns many companies, not only in oil or public utility sector. The overall level of subsidies and social transfers is high. Corporate tax is set at 20% and the VAT at 18%. Personal income is progressive, being 14% up to the high threshold and 30% afterwards, while social contributions stand at 25% of the gross wage, bringing the tax wedge to a high 38% on the average salary.