Within the transition to market economy, roles of tax authorities are continuously growing in implementation of effectual and consistent economic policy and in establishment of state budget income that form the basis of the socio-economic development of the country. This service is created in July 1990 within the Ministry of Finance in accordance with the increased role of the taxes in regulation of market relations during the transition to the market economy and in formation of input part of the state budget, in order to implement new tax policy during new economic relations, secure full and in time collection of taxes and other compulsory payments to the state budget and to provide state control over compliance of physical and legal persons to the tax legislation and state price control.

In October, 1991, the service was removed from the Ministry of Finance in order to improve the control system of compliance with tax legislation and state price discipline, strengthen the role of the state tax service in that sphere and provide the fairness of its independent activities and control measures and began to function as the independent body, Main State Tax Inspectorate under the Republic of Azerbaijan.

By the Presidential Decree of the Republic of Azerbaijan' on 11 February 2000, Main State Tax Inspectorate was abolished, and the Ministry of Taxes was established in its basis as the central executive body providing the implementation of state tax policy in the country, in time and complete collection of tax payments and other inputs to the state budget and implementing government control in that sphere.