Google, Facebook and other online-giants will have to pay an 18-percent value added tax to Tajikistan’s national budget.
Recall, Tajikistan’s lower house (Majlisi Namoyandagon) of parliament has adopted changes to the tax code that will extend liability to international online transactions.
Ads, products and services posted on sites of companies that will refuse to operate in accordance with Tajikistan’s tax legislation will be blocked, according to Your.tj.
Tajik authorities say the solution will not affect the price for Internet in the country.
The idea has been booted around for a few years now. In 2018, it was the Tax Committee that came forward with the idea of somehow forcing companies like Google, Facebook, Microsoft, Booking.com, Chinese online retail service AliExpress and others to pay tax inside Tajikistan. The Finance Ministry rejected the idea at the time.
But the head of the Tax Committee, Nusratullo Davlatzoda, revived the proposal in February.
“Foreign companies are making a profit by providing services to our citizens. We must create an appropriate legal framework, so that [foreign companies] are able to register and pay taxes,” Davlatzoda told reporters in Dushanbe.
Tajik authorities reportedly studied the experience of Russia, Belarus, Uzbekistan and several European Union members while drawing up the changes to the law.
Russian was the first country to introduce the so-called Google tax. The Russian President signed a federal law making e-services VA Table at the location of the customer on July 3, 2016.
Foreign organizations providing e-services in Russia fall within the scope of the Law. For example, the services affected include: remotely granting rights to use software (including updates) via the internet; online advertising services; storage and processing of information online; provision of capacity for posting information; provision of domain names, hosting services; administration of information systems, websites and others.
Some operations are expressly excluded from the scope of the Law. These include, for example, the online sale of goods, provided such goods are physically supplied (without the involvement of electronic means), or the provision of consultancy services by e-mail. The Law came into force in Russia on January 1, 2017. Over the past three years, Russia’s budget has reportedly received about 82 billion Russian rubles in Google tax.
Belarus, Moldova and Uzbekistan have also introduced the Google tax.
Belarus introduced this tax in 2018 and it has received more than 60 million Belarusian rubles in Google tax.
Uzbekistan introduced the Google tax in January this year.
In Kazakhstan, the Google tax is expected to come into force on January 1 2021.
Meanwhile, ActionAid says Google, Facebook and Microsoft should be paying more corporation tax in developing nations.
The aid charity estimates that poorer countries are missing out on up to US$2.8 billion in tax revenue that could be used to tackle the pandemic, the BBC reported on October 26. ActionAid is reportedly calling for big companies to pay a global minimum rate of tax.
According to ActionAid, "billions" might be at stake that could be used to transform underfunded health and education systems in some of the world's poorest countries, especially since multiple tech giants have reported soaring revenues during the pandemic.
The aid charity wants to see a new global tax system created, preferably by the United Nations, whereby large corporations are required to pay a global minimum rate of corporate tax reflective of their "real economic presence."
