Last year, the country’s budget received about 1.6 billion somonis (more than 5050 million US dollars) less due to the practice of granting tax incentives, notes the Tax Committee under the Government of Tajikistan.
It is reportedly equal to 34.3 percent of last year’s budget revenues from internal taxes and other mandatory payments.
In 2023, the country’s budget reportedly received more than 17.3 billion somonis from internal taxes and other mandatory payments, which is 3.8 percent more than the updated plan.
Tax Committee head Nusratullo Davlatzoda, however, believes that at this stage of development of the country's economy, tax exemptions are needed.
“At the moment it won’t be possible without benefits, as they stimulate development. But in the future they will need to be streamlined step by step,” Tajik tax chief officer told Asia-Plus in an interview.
He further noted that in accordance with the current country’s Tax Code, tax benefits cannot be individual in nature: they are granted to priority sectors for a period of no more than 5 years and should not exceed 50% of the tax rate.
Meanwhile, Tajik experts have repeatedly spoken out against the widespread practice of granting tax incentives in the country. According to them, the practice of providing tax exemptions makes the country’s fiscal system any less fair, because due to tax benefits, some pay less than others with the same income.
The International Monetary Fund has also recommended giving up tax exemptions.
A report, released by the Executive Board of the International Monetary Fund (IMF) on February 18, 2022, in particular, notes that the IMF Executive Directors stressed the need for fiscal discipline to ensure that debt remains on a sustainable downward trajectory given the high risk of debt distress. They reportedly recommended introducing an operational fiscal anchor, complemented with steps to phase out tax exemptions, broaden the tax base, and improve public spending efficiency and transparency.
