Tajikistan became the 159th WTO member on 2 March 2013. As a member of WTO, Tajikistan accepted the measures to agreed to liberalize its trade regime and accelerate its integration in the world economy.
The customs legislation of the Republic of Tajikistan is based on the Constitution of the Republic of Tajikistan and consists of the Customs Code and other normative legal acts (i.e. Tax Code, Resolutions, Agreements, etc.) adopted by the Government of Tajikistan. The current Customs Code, which provides a general outline of customs procedures, became effective in March 2006 and relevant amendments from 2007 to 2016. “This Code shall establish the legal, economic and organizational principles of the customs affairs and shall be aimed at protecting the sovereignty and economic security of the Republic of Tajikistan, enhancing the links of the economy of the Republic of Tajikistan within the system of the global economic relations, safeguarding the rights of individuals, economic entities and state bodies, and ensuring the observance by them of their obligations in the area of customs affairs”.
Tax system is administered by the Tax Committee of the Government of Tajikistan and by its district offices (collectively referred to as the tax authorities). The tax authorities register taxpayers, control reporting and payment of taxes and conduct tax audits. Taxes related to certain cross border transactions are administered by the customs authorities.In general, the tax code requires the tax registration of all residents (Tajik legal entities and individuals) and non-residents (both individuals and legal entities) that have a permanent establishment in Tajikistan. The principal taxes in Tajikistan include: income tax from individuals, income tax from legal entities, minimum income tax, VAT, social tax, excise, property tax, sales tax. Tax legislation of Tajikistan is based on the constitution, international treaties, civil code, the tax code and diverse statutes which are issued by the Parliament. Other government agencies, to the extent of their competence, may issue their statutes related to taxation.Tajikistan has double tax treaties with the following countries: Azerbaijan, Armenia, China, Czech Republic, Germany, Kazakhstan, Kyrgyzstan, Latvia, Moldova, Pakistan, Poland, Russia, Turkey, Turkmenistan, India and Ukraine.
Personal Income Tax rates: Progressive rates of 8% to 13% are applied for calculating the income tax of individuals. The employment income of non-residents is taxable at 25%.
Simplified Tax System: Simplified taxation is applicable for individual entrepreneurs if their gross annual income does not exceed 1,000,000 Tajikistan somoni (TJS). Under this regime, individual entrepreneurs are subject to tax at a rate of 5% or 6%, depending on the type of activity.
This Law on Foreign Investment determines the general legal, economic and social conditions for foreign investment in the Republic of Tajikistan. This law aims to provide equal protection of all rights, interests and property of investor regardless of his property status, and ensure the effective functioning of the economy of the Republic of Tajikistan within the framework of market economy. For the purpose of forming a favorable investment and business environment, as well as attraction of foreign investments more than 100 normative and legal acts, regulating this sphere were adopted, including the laws On State Support of Entrepreneurship, On Investments, On Foreign Economic Activity, On Financial Rent (leasing), On Investment Agreements, On Concessions, On Free Economic Zones, On Public-Private Partnership and other regulatory acts. These laws are aimed at legal protection of investments, providing investors with fiscal and non-fiscal incentives, ensuring their participation in the privatization process and infrastructure development. Legislation of the Republic of Tajikistan guarantees equal rights to both domestic and foreign investors, and protects their property from nationalization and requisition. Investors have open access to the real sectors of the economy, and also have the right to carry out exploration, processing and exploitation of the natural resources of the Republic of Tajikistan.Moreover, investors are guaranteed the right to freely transfer abroad income and salaries in foreign currency, obtained legally from investment and production activities. In 2007, in order to improve the investment environment and private sector development, the Consultative Council on Improving the Investment Environment was established under the President of the Republic of Tajikistan, which is a platform for an open dialogue between the government bodies and the private sector.
GDP Annual Growth Rate
2018: 7.3%
2017: 7.6%
2016: 6.9%
2015: 6.0%
2014: 6.7%
2013: 7.4%
2012: 7.4%
2011: 7.4%
2010: 6.5%
2009: 3.9%
Since 2009 the growth of GDP of Tajikistan raised from 3.9% to 7.6-7.3% in 2017-2018. Economic growth occurred because of the private consumption, improving of the economic regional environment supported by public investments, net exports and the establishment of the stable commodities prices. Since 2013 to 2016 the GDP declined from 7.4% to 6.9-6.0%. What are the reasons for the stagnation in economic development of Tajikistan? First of all, Tajikistan is the “world’s most remittance - dependent country”. Ninety percent of money comes from Russia (approximately 43% of Tajikistan’s GDP). “The World Bank notes that “in the first two months of 2015 remittances were about 40 percent lower in U.S. dollar value than in the same period of 2014” and that remittances “are the main channel for transmission of Russia’s slowdown and ruble depreciation to Tajikistan.”(ibid.). There are other reasons that also could stagnate the economy: slowed growth in Tajikistan’s major trading partners (Russia, China, Turkey, other Central Asia republics) and weakening global demand, evidenced by falling prices, for the country’s main export commodities (aluminum and cotton). Since 2016 the economic situation in Tajikistan started to change gradually because of the foreign-financed and private investments. However, still the economy of the country experiences many challenges such as domestic vulnerabilities in the financial sectors, business climate and state-owned enterprises.
The Gross Domestic Product per capita in Tajikistan was last recorded at 1054 US dollars in 2018 and 1015.50 US dollars in 2017. The GDP per Capita in Tajikistan is equivalent to 8 percent of the world's average. GDP per capita in Tajikistan averaged 786.16 USD from 1985 until 2017, reaching an all time high of 1452.30 USD in 1988 and a record low of 365.40 USD in 1996. Based on the table, it is clearly shown that the Gross Domestic Product per capita is increasing stably and by 2020 it is expected that GDP per capita will be 1186 US dollars. The situation positively is changing because of the growth of economy in the country and the establishment of Free Economic Zones that expand the trade with foreigners and facilitate private enterprises.
For 2017-2018 Tajikistan’s leading export partners are Kazakhstan (27.1%), Turkey (19.5%), Luxembourg (10.4%), Afghanistan (8.32%) and Switzerland (7.46%). Tajikistan’s leading import partners are Russia (32.6%), China (20%), Kazakhstan (18.5%), Germany (3.83%), and Turkey (3.79%).
Tajikistan recognizes the United States as a provider of high quality equipment, and is interested in obtaining U.S. components for major infrastructure projects. U.S. EXIM Bank, IFC, EBRD, MIGA funds, OPIC funds could provide financial back up for such projects.
-Tajikistan’s growing links to trading partners in Southern Asia could drive significant economic growth, driving up demand.
-Tajikistan’s economy is heavily dependent on imports, and most U.S. manufacturers would not face competition from local producers, but would face strong competition from China, and to a lesser extent CIS countries.
Moody's Investors Service ("Moody's") has today changed the outlook on the Government of Tajikistan's issuer rating to negative from stable and affirmed the long-term issuer and senior unsecured B3 ratings.
The inflation rate in Tajikistan was recorded at 8.30 percent in April of 2019. Inflation Rate in Tajikistan averaged 12.31 percent from 1999 until 2019, reaching an all time high of 60.60 percent in December of 2000 and a record low of 1.60 percent in June of 2018. The table below shows the inflation in Tajikistan from July 2018 to April 2019.
Unemployment Rate in Tajikistan remained unchanged at 2.30 percent in September from 2.30 percent in August of 2018. Unemployment Rate in Tajikistan averaged 2.42 percent from 2000 until 2018, reaching an all time high of 3.13 percent in January of 2000 and a record low of 2 percent in December of 2004. The graph displays the unemployment rate since October 2017 to September 2018. In most cases, the unemployment rate is stable (=2.3%).
Doing Business Index (The World Bank)- Rank:126. Due to the timely support of the Government of Tajikistan and the ongoing reforms, amount of small and medium-sized business entities is constantly growing and today the portion of the private sector in the GDP structure is about 70%, and almost 80% of tax revenues in the state budget fall on this sector. In addition, 67% of the economically active population are involved in the private sector.
Human Capital Index (The World Bank)- 0.53
Tajikistan presents high-risk, high-reward opportunities for foreign investors who have experience with the region and are willing to put in significant research and effort. The Tajik government has expressed interest in attracting more U.S. investment, but has not yet implemented reforms that would make the poorest of the Central Asian countries a more competitive investment destination.
-Exports in Tajikistan increased to 97.50 USD Million in May from 88.70 USD Million in April of 2018. Exports in Tajikistan averaged 87.96 USD Million from 2000 until 2018, reaching an all time high of 291.80 USD Million in September of 2017 and a record low of 35.10 USD Million in October of 2014. Aluminium and cotton account for over 75 percent of exports. Electricity is the third most important export, a by-product of the country’s hydroelectric dams. Tajikistan’s main export partners are China, Turkey, Russia, Iran and Afghanistan. More than 350 Tajik-Chinese joint ventures have been registered in Tajikistan.
-In 2017 Tajikistan imported $ 3.04 Billions, making it the 145- the largest importer in the world. During the last five years the imports of Tajikistan have decreased at -4.6%, from $ 3.85 Billions in 2012 to $ 3.04 Billions in 2017. The most recent imports are petroleum products which represent 6.19% of the total imports of Tajikistan, and wheat, which accounted for 5.46%.
Description of the table: Blue line shows how the export is changing form 1995 to 2018, red displays the import changes.
Tajikistan is divided into 4 administrative divisions: provinces of Sughd (Capital: Khujand) and Khatlon (Capital: Qurghonteppa), the autonomous province of Gorniy-Badakhshan (abbreviated as GBAO, Capital: Khorugh), and the RRP (Region of Republican Subordination) formerly known as Karotegin Province, capital is Dushanbe.
Sughd Region
It is located in the northwest of the country, with an area of some 25,400 square kilometers and a population of 2,132,100 (2008). The region shares a border with the Jizakh, Namangan, Samarkand and Fergana provinces of Uzbekistan, and the Osh and Batken regions of Kyrgyzstan. The Syr Darya river flows through it. The capital is Khujand (formerly Leninabad), with a population of 155,900 (2008). The economy of Sughd has been growing steadily since 2000, at an average rate of 13.2% in 2008 and 13.3% in 2009. In 2009, farming, trade and industrial production contributed 28.2%, 25.8% and 14.0% to the GRP (Gross Regional Product) of Sughd, respectively. Since 2000, the output of industrial production increased two-fold, at an average annual growth rate of 5–8%. The positive changes occurred also because of the establishment of Free Economic Zone “Sughd Free Economic Zone”. Zijin Mining Group Co. Ltd together with the Tajik government runs a Tajik - Chinese company that operates gold mining on Zarafshon mining site in Zarafshan, Sughd. 75 percent of the company is owned by the Chinese company mentioned above. "Tajik-Chinese Mining Company", is engaged in mining and processing of lead-zinc ores at Altyn-Topkan and Pai-Bulak deposits in Zarnisor, Sughd. The investment, according to the available information, should have summed up to 200 million USD.The local mining committee said that the company will develop and begin construction of two facilities within 4 years - a plant for processing of polymetals at the deposit "Zarnissori Shimoli" in the Matchina district of Sughd region with a processing capacity of 2 million tons of ore per year and a metallurgical plant with a capacity of 20 thousand tons of lead per year.
Bartech Tojikiston Mining is developing the Mushkiston fields in Penjikent district, Sughd. The company fully belongs to the Chinese company Bartech and the investment amounted to 4,1 million USD, according to infonedra.kz.
Earlier this year (2019), the Tajik Ministry of Industry reported that the Chinese company TBEA will develop two gold deposits, Upper Kumarg and Eastern Duoba, in the Ayni district. In return for receiving access to the deposits the company committed to carry out the construction of the Dushanbe 2 thermal power plant, which cost $330m. Under the agreement, the company will extract gold until it reimburses the money spent. The total amount of gold reserves in the two deposits is 52 tons.
Khatlon Region
It is located in the southwest of the country, between the Hisor (Gissar) Range in the north and the Panj River in the south and borders on Afghanistan in the southeast and on Uzbekistan in the west. The total population of Khatlon in 2008 was 2,579,300. The population in Khatlon is mainly engaged in Agriculture. In the region there are two Free Economic Zones: Dangara and Panj. Moreover, in 2019 it was announced that the new FEZ “Kulob” will be constructed. This region is important because of its location since it connects significant areas with many natural resources. As it was mentioned there are three FEZs that attract foreign companies and investments. On their territory many Chinese companies operate: LLC “Tk Oil Refinery Dangary”, LLC “Detien Concrete”, LLC “Aufen”.
The Government of Tajikistan has allocated more than 9,500 hectares of land for 49 years to a construction company laying the Tajik section of the Turkmenistan-China gas pipeline. According to the data of the joint venture Trans-Tajik Gas Pipeline Company Limited in Tajikistan, according to the resolution of the Government of the Republic of Tajikistan, the pipeline will pass through Rogun, Rudaki, Liakhsh, Nurabad, Faizabad and Rasht regions. The pipeline is about 1,000 kilometres long and only 400 kilometres through Tajikistan. The Tajik-Chinese company Trans-Tajik Gas Pipeline Company Limited is a joint-stock company with 50% of shares owned by Tajikistan.
Abdugani Mamadazimov, head of the Silk Road organisation, said the project will attract about US $3 billion to Tajikistan's economy.
Autonomous province of Gorniy-Badakhshan
It is located in the Pamir Mountains, it makes up 45% of the land area of the country but only 3% of its population.The population as of 2017 is estimated at 223,600.According to the State Statistical Committee of Tajikistan, the main ethnic group in GBAO are Pamiris.The remainder of the population is ethnic Kyrgyz and other nationalities. The largest city in GBAO is Khorugh, population 29,000 (2008 est.); the second largest is Murghab, with about 4,000 residents.Only two easily navigable roads connect GBAO to the outside world, Khorog-Osh and Khorog-Dushanbe, both of which are segments of the Pamir Highway. A third road from Khorog to Tashkurgan in China through the Kulma Pass is very rough. The region has no major industries to speak of. Unemployment is believed to be well over half of the eligible workforce despite a government figure of around 20 percent. On June 14th agreement was reached between the government of Tajikistan and the Chinese company Kashy Sinui Mining Investment Ltd. to initiate a mining project on the silver mine called “Yakjilva” in Murghab region of GBAO. The amount of investment and the agreement conditions of mining are not available. Although, it is known that the mine is estimated to contain around 200 tons of silver. Additionally, it is expected that in Yakjilva mine, one ton of the minerals might contain several times more silver compared to “Koni Mansuri Kalon” which is considered to be the largest silver mine in Central Asia.
Region of Republican Subordination (Dushanbe)
It is a region in Tajikistan, consisting of 13 districts that are directly under central rule. Dushanbe is the main center of economy that includes the main offices of many NGOs and governmental offices. Some researchers believe “The city of Dushanbe has an enormous potential to become the economic center in the long run and the most attractive for investments city of Central Asia”
China Nonferrous Gold Limited, will soon start gold production in the richest gold deposit with 134 tons of reserves in Vahdat. The field is known by the name Pokrud and the investment, according to infonedra.kz is equal to 36,9 USD.
Earlier this year (2019), the Tajik Ministry of Industry reported that the Chinese company TBEA will develop two gold deposits, Upper Kumarg and Eastern Duoba, in the Ayni district. In return for receiving access to the deposits the company committed to carry out the construction of the Dushanbe 2 thermal power plant, which cost $330m. Under the agreement, the company will extract gold until it reimburses the money spent. The total amount of gold reserves in the two deposits is 52 tons.
On June 15, 2019 the leaders of China and Tajikistan signed a project to build a new parliament building worth 1.5 billion yuan ( more than 217 million USD) in the centre of the capital of Tajikistan.
Ministry of Finance - http://www.minfin.tj/
Ministry of Foreign Affairs - http://mfa.tj/index.php?lang=english
Dushanbe City Government - http://www.dushanbe.tj/
"National Bank of Tajikistan - http://nbt.tj/tj/
Investment Guide - http://www.tajinvest.tj/?q=en/node/164