A concluding statement made by the International Monetary Fund (IMF) mission notes that strong growth continued in 2022, with minimal disruption from the war in Ukraine. After growing by 9.2 percent in 2021, real GDP reportedly increased 8.0 percent (year-on-year) during January-October, reflecting broad-based growth in industry (including mining), agriculture, and construction.
Remittances slowed immediately after the beginning of the war but rebounded sharply in Q2. This helped keep the current account in surplus and boost FX reserves from US$2.5 billion at end-2021 to US$3.4 billion in October, more than 8 months import coverage.
According to the statement, tax collection has benefitted from increased revenue from the mining sector, reflecting strong growth in mining and an increase in the income tax rate for mining companies, together with steps to begin phasing out some tax exemptions. This reportedly helped keep revenues broadly unchanged as a share of GDP from 2021, despite reductions in VAT and income tax rates introduced at the beginning of 2022.
The statement notes that sustained efforts to broaden the tax base by fully phasing out tax exemptions and improving tax administration are essential to increase space for critical investments in health care, education, social protection, and infrastructure that are needed to achieve Tajikistan’s development goals under the National Development Strategy-2030.
Development of a medium-term term revenue strategy would provide a framework to anchor improved domestic revenue mobilization. Accelerating the transition to GFSM2014 for fiscal reporting is also essential to upgrade the quality of fiscal statistics. Given the sensitivity of revenues from the mining sector to international commodity prices, collecting data on mining-related revenues is important for revenue forecasts and fiscal policy purposes, the statement says.
Meanwhile, President Emomali Rahmon noted in his address to a joint meeting of both chambers of parliament on December 23 that in 2022 the fiscal revenues amounted to 33 billion somonis (TJS) and increased by 38% compared to 2018.
To date, over 120 tax and customs incentives have been offered to businesses and investors, the number of public agencies for business registration have been reduced from 4 to 1 and the registration services are provided free of charge, the head of state said.
The tax and customs benefits applied in 2022 reportedly amount to over TJS12 billion.
Thus, the reduction and elimination of the rates in 5 types of taxes enables the business will save more than TJS1.5 billion as a support, Rahmon said noting that as a result, the number of business entities reached 339,000 in 2022 and increased by 76,000 compared to 2018.
Recall, the new version of the Tax Code, which proposes many additional incentives and privileges, has been introduced as of January 1, 2022.
