In 2025, tax incentives will be provided under 17 provisions outlined in the "Law on the State Budget of Tajikistan for 2025." Among the beneficiaries is the five-star Ismoili Somoni Hotel, which has been under construction in Dushanbe for nearly 19 years.
The hotel’s groundbreaking ceremony took place on March 15, 2006, with initial plans to complete the project within 18 months. Next year, the project’s client and general contractor will pay only 50% of the Value-Added Tax (VAT) and Corporate Income Tax (CIT), which are normally set at 14% and 18%, respectively.
Similar tax benefits will apply to the builders of the National Theater in Dushanbe, the new building of the Ministry of Industry and New Technologies, a 30,000-seat stadium in Dushanbe, and other projects across the capital and regions.
Adjusted tax rates for key sectors
- Wheat and pasta production: the VAT rate for the import, processing, and sale of products made from wheat (excluding wheat used for producing alcoholic beverages) and pasta manufactured in Tajikistan will be set at 10%, reduced from the standard VAT rate of 15%.
- Public transport imports: equipment, special vehicles, spare parts, and buses purchased using funds from the national and Dushanbe city budgets for expanding public transportation fleets will be exempt from 50% of VAT and entirely exempt from customs duties.
- Production of essential goods in into Dushanbe: the state enterprise responsible for the production, procurement, and sale of essential goods in Dushanbe will be exempt from 50% of VAT on food sales and imports (as approved by the government) and will also be fully exempt from customs duties.
Major projects and energy sector relief
Energy companies:
- Sangtuda-1 and Roghun hydropower plants will not accrue interest on their tax arrears resulting from electricity supplied by Barqi Tojik (the state-run energy utility).
- Dushanbe Combined Heat and Power (CHP) Plant: importers of low-sulfur fuel oil for the Dushanbe CHP plant will also receive tax relief.
- Roghun hydropower plant contractors: certain contractors involved in the Roghun hydroelectricity power project (HPP) will be granted tax incentives.
Other Beneficiaries
- Ministry of Foreign Affairs: The supplier of biometric passport blanks with electronic data will be exempt from certain taxes.
- Tajikistan Football Federation (TFF): The organization will benefit from unspecified tax incentives.
- Tree and Seed Importers: Suppliers of specific seeds, evergreen trees, and ornamental plants for Dushanbe parks and streets will receive exemptions.
- State Materials Reserve Agency: this agency will receive tax breaks on approved imports.
- Bitumen Importers: The state enterprise Rohsoz (Road Construction) will be granted incentives for bitumen imports.
- The Branch of the Management Development Institute of Singapore (MDIS) in Dushanbe: builders of this institute’s branch in Dushanbe will be eligible for tax relief.
These measures reportedly aim to stimulate investment in key infrastructure, public services, and strategic sectors while supporting the development of Tajikistan’s economy in 2025.
As it had been reported earlier, the country’s budget last year received about 1.6 billion somonis (more than 550 million US dollars) less due to the practice of granting tax incentives. The Tax Committee says it is equal to 34.3 percent of last year’s budget revenues from internal taxes and other mandatory payments.
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 (IMF) has also recommended giving up tax exemptions. A report, released by the IMF Executive Board 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 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.
