Organizations of Tajikistan’s civil society want to participate in reviewing the country’s new tax code.
They wrote a letter to the Ministry of Finance asking to provide them a draft new tax code for information and preparation of proposals.
Civil society organizations, in particular, propose to organize a joint discussion of the daft new tax code in Dushanbe and in the regions.
The current Tax Code of the Republic of Tajikistan came into force on January 1, 2013. In May last year, President Emomali Rahmon ordered to develop a new tax code taking into consideration interests of entrepreneurial entities and citizens of the country.
Finance Minister Faiziddin Qahhorzoda told reporters in Dushanbe on February 13 that a new tax code should be adopted before September this year so that the national budget for 2021 would be worked out on the basis of it.
Meanwhile, the Asian Development Bank (ADB)’s Asian Development Outlook (ADO) 2020 notes that heavy infrastructure spending has created pressure to mobilize more revenue. Tax revenue reportedly averaged the equivalent of 22.2% of GDP during 2015–2019 and provided nearly 70% of total revenue, above the average for low-income developing countries. Much of the burden falls on companies, for which the effective tax rate including required pension and insurance contributions averages 67% for a typical firm, according to the report. This is more than double the norm for transitional economies in Europe and Central Asia, according to the World Bank’s Doing Business 2020 website.
The unfavorable tax regime makes tax compliance costly and time consuming, prompting firms to relocate to neighboring countries. The report says Tajikistan must reconsider how to make its tax policy more business friendly while finding other ways to increase revenue in order to improve the investment climate.
