President Emomali Rahmon on June 5 signed a decree on preventing impact of novel coronavirus (COVID-19) on socioeconomic spheres of Tajikistan.
The decree, in particular, provides for giving tax recesses to tourism and relevant industries (hotels, catering organizations), health and sports centers, international passenger services, and air navigation from May 1 to September 1, 2020 and prohibiting charging of interest for late payment of taxes during this period. However, only small part of Tajik entrepreneurs will get tax benefits.
President, in particular, decrees:
– to exempt small and media-sized enterprises, which completely suspended their activities due to the COVID-19 outbreak, from paying rent for state properties;
– to prohibit application tax liability measures against economic entities failing to pay taxes on time from May to September 1, 2020;
– to exempt individual entrepreneurs working at trade centers and consumer service points from paying taxes from May 1 to August 1, 2020;
– to give tax recesses to physical entities on payment of taxes on real estate from May 1 to September 1, 2020.
– to exempt import of all materials being used for production of disinfectants, medicines and medical protective clothing as well as equipment for medical labs for implementation of COVID-19 diagnostic test to implement from paying customs duties, value added tax (VAT) and excise tax from July 1 to September 1, 2020;
– to exempt medical facilities, hotels and resort centers freely placing citizens, being under medical supervision or undergoing treatment for COVID19, for an appropriate term;
– for the purpose of maintaining population income, to lower the rate of income tax rate for the percentage of deposits of individuals from 12 to 6 percent.
Besides, the decree orders to regulate prices for consumer goods, including medicines, face masks, antiseptics, as well as wheat flour and bakery products, sugars, vegetable oil, potatoes, beans, soaps, and fuels in the country.
The head of state also ordered not to raise utilities rates until the end of this year.
What does the business think about it?
Meanwhile, some Tajik experts consider that these benefits will apply to only a small part of local entrepreneurs.
“First of all, you need to understand that these benefits do not apply to most of the business. Only those who have worked on the basis of patent and have suspended their operations over the past couple of months will get benefits from this decree,” Dushanbe entrepreneur Asliddin Nazarov told Asia-Plus in an interview.
“The benefits will not apply to the bulk of entrepreneurs, for example middle-sized entrepreneurs. While in principle, they must be exempted from paying all types of taxes during two months,” Nazarov added.
Another Tajik economist, speaking on condition of anonymity, told Asia-Plus that many of the mentioned measures would have zero effect.
“As far tax recesses for tourism and relevant industries (hotels, catering organizations), health and sports centers and so forth are concerned, it means that these facilities have been granted tax deferment, without interest. I admit that they will be forced to pay taxes on minimum wages, if full-time employees are not fired. The effect of this for entrepreneurs will be zero,” said the economist.
Meanwhile, another Tajik economist, who writes under the pen name of Anvar Kamolov, considers the measures taken justified, “although a little belated.”
He also points to the necessity of paying attention to the system problems existing in the country’s telecommunications sector so that Internet service providers and telecommunications companies could actively develop platforms for electronic government, services and payments. It is a question of the long-standing need for de-monopolization of the country’s telecommunications sector.
“The communications service agency should be restructured and devoid of monopoly on the national provider Tajiktelecom that kills the whole sector,” said the expert.
