The World Bank (WB) analysts recommend that the Tajik authorities improve tax administration that can increase private investment in Tajikistan.
An article titled Improved Tax Administration Can Increase Private Investment and Boost Economic Development in Tajikistan that was posted on the World Bank’s website on March 12, in particular, notes that revenue collection in the country remains challenging due to several factors, including poor quality taxpayer services, low institutional capacity, and gaps in tax policy analysis and revenue forecasting.
The article says that inadequate staffing, limited training, low levels of computerization and poorly integrated IT systems have further complicated procedures for taxpayers and make data collection difficult for Tajikistan’s Tax Committee.
Coupled with reported corrupt practices by tax officials, these issues contribute to weakening both the business climate and private sector growth. Business surveys have regularly identified weaknesses in tax administration, as well as arbitrary and corrupt behavior by tax officials, as major impediments to the success of small and medium enterprises in Tajikistan, according to the article.
To support the government’s efforts to build a more efficient, transparent and service-oriented tax system, the World Bank-financed Tajikistan Tax Administration Reform Project was launched in 2013. The Project has made significant progress to date in helping the Tax Committee and its field offices to operate more effectively in a newly automated environment. Modernization of IT infrastructure and the introduction of a unified tax management system mean increased efficiency, with reduced physical interaction between tax officials and taxpayers, the article says.
“The Project has achieved good results and we can see significant improvements in the operational capacity of the Tax Committee,” says Hassan Aliev, project leader and World Bank Public Sector Specialist based in Dushanbe. “However, tax administration is just one part of an effective tax system. We will continue working with the Government of Tajikistan to further improve the effectiveness of tax policy in terms of revenue collection, and to that ensure taxation does not impose a negative burden on the business environment.”
Meanwhile, a recent study by the International Finance Corporation (IFC) notes that a taxpayer in Tajikistan spent 21 days in 2016 complying with all tax-related regulations, compared with 33 days in 2012. This reduction in time spent represents a total of US$ 8 million in savings in one year for all taxpayers registered in the country.
