Tajikistan’s new Tax Code is planned to be adopted within the next few months, Nusratullo Davlatzoda, the head of the Tax Committee under the Government of Tajikistan, told reporters in Dushanbe on July 30. 

“The draft tax code is currently under consideration by the Government,” Davlatzoda said, noting that amendments offered to the tax code reduce the burden on taxpayers. 

Tajik chief tax officer emphasized that changes proposed to the country’s tax legislation at first would definitely reduce the volume of tax receipts, “but in the medium term, income will grow.”

Recall, the draft new Tax Code of Tajikistan has been developed by the working group in cooperation with international and domestic experts.   

President Emomali Rahmon initiated development of a new tax code in late May 2019.  He ordered to take into consideration interests of business entities and citizens of the country while developing the new tax code.

In a statement delivered at a joint session of both houses of parliament, President Emomali Rahmon on January 26 ordered relevant ministries and agencies to complete the country’s tax code in new reading until March this year and submit it for consideration to the government.

Meanwhile, the Asian Development Bank (ADB)’s Asian Development Outlook (ADO) 2020 notes that heavy infrastructure spending has created pressure to mobilize more revenue.  Tax revenue reportedly averaged the equivalent of 22.2% of GDP during 2015–2019 and provided nearly 70% of total revenue, above the average for low-income developing countries.

Much of the burden falls on companies, for which the effective tax rate including required pension and insurance contributions averages 67% for a typical firm, according to the report.  This is more than double the norm for transitional economies in Europe and Central Asia, according to the World Bank’s Doing Business 2020 website.

The unfavorable tax regime makes tax compliance costly and time consuming, prompting firms to relocate to neighboring countries. The report says Tajikistan must reconsider how to make its tax policy more business friendly while finding other ways to increase revenue in order to improve the investment climate.