Tajikistan is expected to reduce number of type of taxes and lower some tax rates. So, at least, it says in the new edition of the tax code, which has not yet been adopted.
The inter-agency commission has completed the final version of the country’ tax code in new edition and submitted it for consideration to the government.
The tax code in new edition, in particular, provides for reducing the number of types of taxes from ten to seven.
Thus, the new tax code proposes to abolish a road user tax and include it in an excise tax.
The new tax code also provides for combining local taxes on real estate and vehicles.
Besides, the new tax code authors propose to cancel the tax on sale of primary aluminum, which is proposed to be considered in the future as a payment.
Thus, if parliament endorses the draft new tax code, six republican taxes (income tax, profit tax, excise tax, value added tax, social tax and natural resources tax) and one local tax will remain in the country’s legislation.
Meanwhile, it is also proposed to abolish a special tax regime for gambling entities and preferential tax treatment for securities market entities and add tax regimes for Islamic banking and legal practice.
It is to be noted that in accordance with special tax regimes set by the country’s tax legislation, separate categories of taxpayers pay some taxes in a simplified procedure.
The draft new tax code also provides for lowering some tax rates to the level of neighboring countries in order to lighten tax burden on private sector.
The draft new tax code, in particular, provides for lowering rates of two main taxes: value added tax (VAT) and income tax.
The tax code authors propose to lower VAT rate from current 18 percent to 15 percent.
Taking into account recommendations of international specialists, they also propose to lower the rate of social tax for insurers (employers) from current 25 percent to 20 percent.
Besides, international financial institutions advise to set the flat income tax at the rate of 12 percent.
Under the current tax legislation, income tax is paid at the rate of 8 percent for incomes above personal deduction (a calculation index) up to 140 somoni and at the rate of 13 percent for incomes above 140 somoni.
The draft new tax code also provides for raising the rate of personal deduction from monthly wage from one to two calculation indices. The current calculation index amounts to 58.00 somoni.
Besides, the draft new tax code provides for setting a flat rate of the gross income tax for business entities at 18 percent.
Current rates of profit tax are 13 percent for producers of goods and 23 percent for other categories of taxpayers.
The new tax code authors also propose to set the profit tax for mobile phone companies and subsoil users at the rate of 20 percent and for betting and lottery activities at the rate of 25 percent.
Besides, the draft new tax code provides for exempting newly established industrial production facilities and the active enterprises injecting additional capital into their statutory funds from paying profit tax (simplified tax) during five years.
To promote enterprises engaged in full cotton processing the draft new tax code proposes to provide a 12 year grace period to them.
