- Basic data
- Public finances and the state budget
- Banking system
- Tax system
In Tajikistan, we have been observing stable economic growth in the last decade, which ranged from 6 to 7%. In 2020, due to the COVID-19 pandemic, GDP growth decreased to 2.2%, but in 2021 it slowly started to return to higher growth trends again. In 2022, the population is estimated to reach 10 million and GDP per capita at purchasing power parity is expected to exceed $5,000. The easing of restrictive measures, sustainable agricultural production and the partial return of remittances by workers abroad contribute to the improvement of the economic situation, but these may be threatened again due to the war of sanctions imposed on Russia. These can affect the shortfall on the revenue side of the budget, which would lead to a decrease in the standard of living of a significant part of the population, an increase in unemployment and inflation.
According to cheeroutdoor.com, the main items in Tajikistan’s imports have long been mineral fuels, cereals, iron and steel, machinery and mechanical equipment. The country mainly exports gold, cotton, ores and slag, aluminum, fruits and vegetables. In order to maintain social peace and stability, it will be important to ensure a rapid recovery of the economy and, in particular, the creation of hundreds of thousands of new job opportunities per year. The country’s priority is the diversification and modernization of the economy, substitution of imports (localization of production) and attraction of foreign investments.
|GDP growth (%)||7||2.2||5||5.2||5.4|
|Export of goods (billion USD)||1.4||1||0.9||1.1||1.3|
|Import of goods (billion USD)||3.6||2.7||3.7||4.3||4.7|
|Trade Balance (Billion USD)||-1.9||-1.4||-1.8||-1.9||-2.1|
|Industrial production (% change)||ON||ON||ON||ON||ON|
|OECD export risk||07.VII||07.VII||07.VII||ON||ON|
Source: EIU, OECD, IMD
Public finance and state budget
|State budget balance (% of GDP)||-2.1|
|Public debt (% of GDP)||48.3|
|Current account balance (billion USD)||-0.1|
|F.O||12 / 20|
The budget deficit decreased to -2.7% of GDP in 2021 thanks to the resumption of economic activity in the world and the region, government measures and the attraction of domestic and foreign investments. The government increased spending on health care and received loans from international organizations to support the country’s economy. Budget revenue in January-September 2021 was 2billion somoni ($2.31 billion), expenditure was 2billion somoni ($billion), which is 5.6% more than was planned. At the beginning of the year, the Tajik government expected a total state budget (revenue) of 27.64 billion (2.45 billion USD).
In terms of spending, in the first half of 2021, the government invested 969 million somoni ($85 million) in Tajikistan’s energy sector. More than 630 million somoni ($55 million) were spent in the transport sector and 160 million somoni ($14 million) in housing and communal services, 250 million somoni ($21 million) in health and education.
In 2022, Tajikistan expects revenues to the state budget of 33 billion somoni (over billion USD), which is 19.4% more than in 2021. The revenue side of the Tajik budget is mainly made up of tax collection (about 62%), followed by loans and credits (26%), non-tax revenues (4.5%) and funds from charitable organizations (7.5%). Spending is expected to reach 3billion somoni (about $3 billion) in 2022, up 19.5% from the previous year. Roughly 44% of expenses will go to social areas – education, healthcare and social assistance to the population. About 6 billion somoni should be invested in the country’s energy complex, incl. completion of the Rogun hydropower plant. In 2022, a state deficit of 624 million somoni is planned.
Tajikistan’s public debt in financial terms amounted to about billion USD as of January 1, 2022, of which China is the largest creditor, accounting for about 35%, or billion USD. Other lenders include the European Bank for Reconstruction and Development, the World Bank, the Asian Development Bank, the Islamic Development Bank and the International Monetary Fund.
The banking system of Tajikistan consists of the National Bank, commercial banks and non-banking financial organizations. The National Bank of Tajikistan performs issuing functions, is the manager of currency reserves and national debt, implements monetary credit policy, ensures regulation and supervision of the activities of commercial banks, represents Tajikistan in international financial and credit institutions.
- branch banks of foreign banks (e.g. Tižorat, Iran)
- non-bank financial organization
- credit unions small finance organizations (at the regional level)
- small savings organizations (at the regional level)
- organization providing small loans (regional level)
- small loan funds (at the regional level)
- CreditInvest, providing consumer loans.
The most important commercial banks are Orienbank, Amonatbank, Sochibkorbank, BankEschata and Pervyj mikrofinansovyj bank, Bonki rushdi Tochikiston, Chalyk Bank Tajikistan, Kafolatbonk, Bank Arvand, Bank Azija, a subsidiary bank of the National Bank of Pakistan in Tajikistan, a branch of the Iranian bank Tijorat in Tajikistan, Spitamen Bank, International Bank of Tajikistan, KommercbankTajikistan, AlifBank.
As of March 1, 2021, the assets of the banking system and small financial companies of the republic amounted to 1billion somoni ($99million). According to the data of the Statistical Office of TJ, of these, billion somoni are short-term loans, 7.6 billion somoni are long-term loans. in the Banking Sector of Tajikistan, automation, introduction of new technologies and the online-payment system are gradually being carried out.
More details on the banking system are available on the website of the National Bank of Tajikistan: https://nbt.tj/en/banking_system/banks.php
In Tajikistan, taxes are divided into national and local.
- personal income tax, the tax rate is 8% for income up to 140 somoni, 13% for income above 140 somoni, 25% for non-residents.
- corporate profit tax: for manufacturing enterprises – 13%, for other enterprises – 23%.
- value added tax – all companies regardless of owner or form of ownership pay value added tax of 18%
- excise duty
- social contributions (health and social insurance) – 25% is paid by the employer, the employee nothing, individual entrepreneurs – natural persons pay 20%
- land tax, from 180 to 500 somoni per one hectare
- tax on the exploitation of mineral wealth deposits; for precious metals it is 10%
- property tax from 3 to 12%
- motor vehicle ownership tax from 2% to 11%
- road tax, 1% of transport costs
- simplified tax for small entrepreneurs 4%
- cotton and aluminum sales tax, 10% or 3%
- customs duties and other customs fees (determined by the government)
- state customs fees (set by the government)
- retail sales tax, 3%
- real estate tax of natural persons, from 3% to 25%
- public transport maintenance tax (payable by all who pay social contribution) from 1% to 14.5% depending on engine performance
The average annual share of personal income tax, corporate income tax and value added tax is a total of 70%. In the structure of taxes, the share of VAT is 44%, the share of income tax is 14% and the share of social tax is 12%. VAT in Tajikistan has a uniform rate of 18%; however, sometimes certain goods or directions are given preference: this rate is reduced depending on the degree of need to support a certain area. Unlike income tax, only legal entities pay VAT. It is applicable to certain types of services: delivery of goods, services and performance of work. Income tax is a tax on the income of natural persons. It is calculated as a percentage of an individual’s annual income. The uniform rate for individual citizens of Tajikistan is 13% and for foreigners – 25%. Social tax is a compulsory payment paid to the insurer (employer) for social insurance in the amount of 25% and by the insured persons (employees) in the amount of 1%.