World Bank Supports Tax Strategy Reforms in Tajikistan

June 16, 2010

DUSHANBE, June 16, 2010 – To enhance the governance and improve business climate in Tajikistan, a draft Tax Administration Reform Strategy Paper was prepared by Tax Committee of the Republic of Tajikistan with the technical assistance from “SOFRECO”, the French consulting firm, and financed from the Institutional Development Fund grant, provided by the World Bank, was discussed. The main goal of the new strategy is to create a modern service –oriented, effective and efficient tax authority in Tajikistan.

The new strategy was discussed during the half day meeting with the  governmental officials from the Tax Committee, Office of the President, Ministry of Finance , Ministry of Economy and Trade, State Committee on Investments  and State Property Management, the National Bank  and the bilateral donor agencies - the World Bank , IFC, USAID, IMF, ADB, DFID, EC, and SDS.

“We need a functioning tax administration and modernization in tax collection. The new Strategy document focuses on improving the efficiency and effectiveness of the tax administration in collecting revenue while at the same time providing a more business friendly environment, which will encourage citizens to file declarations and make payment of taxes voluntarily without routine contact with tax office.  This strategy will help improve the investment climate and support growth and development of Tajikistan,” - said Ms. Chiara Bronchi, World Bank Country Manager in Tajikistan.

The new Strategy has eight goals to reach: 1) Strengthening core functions of the Tax Committee, 2) Modernize  IT systems and exchange of information, 3) Strengthen Large Taxpayers' Inspectorate ; 4) Develop Medium Taxpayers Inspectorate; 5) Improve motivation and taxpayer service; 6) Improve tax legislation; 7) Improve service to SMEs; and 8) Secure Resources for Reform.

“Reforming tax administration is a top priority of the Government of Tajikistan. The new strategy will be implemented for over five years and is expected to result in concrete measures to improve the administration of revenue in the country,”- said Mr. Buriev, Senior Advisor on economical politics  to the President of the Republic of Tajikistan.

Changes in the new strategy envisage simplification of taxpayer registration through completing the one-stop-shop process. Large Taxpayers' Inspectorate currently generates only 44% of revenues from 213 enterprises and with the new reforms it is planned to generate 60-80% of revenues from 350-600 large enterprises. Medium Taxpayers Inspectorate will be created and piloted in Dushanbe and Khujand, two big cities in Tajikistan, which will capture around 5, 000 enterprises. For small taxpayers, taxpayer education and services will be improved under the new strategy.

It is important for the tax administration to switch from control mentality to a service-orientated organization. Improvement of services under the new strategy means that the frequency of filings and payments will be reduced, declaration forms will be simplified, and enterprises will start self-reporting.
To simplify the declaration forms, the tax committee will publish them online.

“Tax administration is important. It demonstrates the face of the Government. The new goals indicated under the new strategy are ambitious, and without technical and financial resources, implementation of tax reforms would be impossible.  In order to achieve good results, comprehensive reforms are more effective than piece-meal efforts. In addition it is important to improve taxpayer education,” -said Munawer Khwaja, Senior Public Sector Specialist of the World Bank.

The Government expects to discuss the strategy internally over the next couple of months and issue a Government decree in autumn 2010.

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Elena Karaban
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In Tajikistan
Fakhriniso Kurbonshoeva
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