The Parliament of Tajikistan adopted a new tax code

On November 3, the Minister of Finance of Tajikistan Faiziddin Kahhorzoda presented the draft of a new tax code to the parliament.

Photo: Internet

The minister stated that the number of taxes has been reduced from 10 to 7, and the tax rates in the new tax code have been lowered: the VAT rate from 18% to 15%, the corporate income tax from 23% to 20%, and the personal income tax from 13% to 12%.

According to the draft law, the vehicle tax has been combined with the property tax, and the excise tax on electronic services will increase from 5% to 7%.

Members of parliament adopted the draft law without much discussion.

Entrepreneurs and international experts have noted for many years that tax rates in Tajikistan are excessively high. Most experts also believe that the Tax Code of Tajikistan places a heavy burden on entrepreneurs, and that the three changes made since independence have not created any favorable conditions for business development.

In the World Bank Group and PwC report “Paying Taxes 2019,” which covered 190 countries, Tajikistan ranked among the top ten countries with the highest tax burden. The overall tax rate in Tajikistan was 67.5%, which is more than double the average tax rate in Central Asia and Eastern Europe of 32.8%.

Earlier, the representative of the Asian Development Bank in Tajikistan Pradip Srivastava criticized the tax system of Tajikistan and stated the need for changes to the current tax legislation of the country. He suggested shifting the focus of the country’s tax legislation, which is currently centered on revenue collection for the budget, and recommended focusing on providing benefits and incentives for taxpayers in the new Tax Code.

It should be noted that about 70% of Tajikistan’s budget is replenished through taxes.