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Dushanbe, July 6, 2007 —
IFC, the private sector arm of the World Bank Group, the International Monetary Fund, and the State Tax Committee of Tajikistan last week hosted a conference on “Tax Administration Development during the Independence Period of the Republic of Tajikistan.” The objective was to increase entrepreneurs’ awareness of the 2005 tax code and discuss further improvements in tax administration.
The State Tax Committee of Tajikistan expressed its readiness to consider suggestions from entrepreneurs and other interested parties to improve tax administration.
“Tajikistan’s tax system needs to help achieve goals such as increasing tax collection, promoting and developing small and medium entreprises, and attracting foreign and domestic investments to develop industrial potential and create new jobs,” said Bakhtiyor Sultonov, Deputy Chairman of the State Tax Committee of Tajikistan.
IFC’s Andrea Dall’Olio described the current situation in small and medium enterprise taxation based on the results of the business-environment survey conducted by IFC in Tajikistan in 2006. According to the survey, tax administration in the country is cumbersome, while the overall burden is high, especially for growing businesses. The survey also revealed that the patent system of taxation, preferred by most individual entrepreneurs, is complicated due to the need to pay social and retail taxes separately.
“Creating a super patent, which would include the cost, social tax, and retail trade tax would make the taxation process for individual entrepreneurs simpler. We believe a simplified and more transparent system would have a significant impact on improving the country’s business environment,” said Dall’Olio, IFC Operations Officer.
Luc Moers, IMF Resident Representative, supported IFC’s recommendations on SME taxation, noting that careful assessment of the impact on tax revenues was needed. He also stressed that more attention should be given to reducing tax arrears, which have increased in recent years, particularly those of state-owned enterprises. Moers argued that tax committee resources should be concentrated where the largest revenue gains can be achieved and that resources allocated to inspectorates that generate minimal revenue should be reduced. “Most of the difficulties we are discussing are caused by the confusion about implementing the tax code and not by the code per se. The top priority should be to develop the required supporting regulations for proper implementation of the existing code,” he noted.
Additional recommendations from participants included consolidating taxes to simplify process, combining the social and tax registration numbers, conducting awareness campaigns about tax inspections, and increasing the quality of such inspections.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products has committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business-enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit www.ifc.org.
About IFC Business-Enabling Environment - SME Policy Project
Launched in 2003, the project is financed by Switzerland’s State Secretariat for Economic Affairs. In addition to monitoring the business environment by conducting regular surveys, the project is helping implement the new inspections law, conducting preliminary analysis for the permits reform, and raising awareness of small and medium enterprises through training and events. For more information, please visit
www.ifc.org/tajikistan/sme
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About IMF
The IMF works to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty. To maintain stability and prevent crises in the international monetary system, the IMF reviews national, regional, and global economic and financial developments. It provides advice to its 185 member countries, encouraging them to adopt policies that foster economic stability, reduce their vulnerability to economic and financial crises, and raise living standards, serving as a forum where they can discuss the national, regional, and global consequences of their policies. The IMF also makes financing temporarily available to member countries to help them address balance of payment problems—that is, when they find themselves short of foreign exchange because their payments to other countries exceed their foreign exchange earnings. The Fund also provides technical assistance and training to help countries build the expertise and institutions they need for economic stability and growth. For more information, please visit
www.imf.org/external/country/tjk/rr
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About SECO
The State Secretariat for Economic Affairs is the Swiss Confederation's competence center for all the core issues related to economic policy. Its aim is to create basic regulatory and economic policy conditions to enable business to flourish and benefit all. SECO also represents Switzerland in the large multilateral trade organizations and international negotiations, and is involved in efforts to reduce poverty and help developing countries with transition economies build sustainable democratic societies and viable market economies. Each year, Switzerland spends about 1.9 billion francs on development cooperation and transition assistance to countries.
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