DUSHANBE (Asia-Plus) — The Government of Tajikistan has approved a list of goods, materials and equipment for the construction of modern greenhouses, which are exempted from VAT and customs duties at import.

The list contains 72 names of construction goods, materials, devices and equipment. It includes, among others, prefabricated constructions, air-conditioning units, electrical engines and generators, equipment for greenhouses irrigation, agricultural machines, various fertilizers and so on.

A government decree instructs the Customs Service to ensure the registration of goods imported on this list, and to present the information to the Finance Ministry until 1 February 2022.

Are tax breaks good or bad?
Some experts believe that exemptions make the tax system worse in terms of neutrality, fairness, efficiency and simplicity. Furthermore, for them sector and industry-specific tax breaks are not welcome, as such breaks encourage entrepreneurs to engage in the wrong kind of business, which they know well and would like to do in a neutral tax regime.

Asian Development Bank representative Shanny Campbell, in a recent interview with Asia-Plus, recommended “reviewing tax incentives to further broaden the tax base”. She said “Tax incentives should be given to those activities that have a clear and controllable impact on investment, innovation, regional development and/or job creation”.

Campbell noted that as part of a recent $50 mln ADB grant program, the government of Tajikistan adopted a regulation on how tax and customs exemptions should be granted to ensure transparency. “As a result, a cost-benefit analysis system has been introduced to assess the effectiveness of tax incentives and an authorized state body has been identified to provide tax and customs concessions”, she said.

The cost-benefit analysis of tax exemptions is one of the items of the Tax Reform Programme in the country, for the implementation of which the World Bank is also providing grant aid of 50 mln. Last December, the government adopted a procedure for granting tax and customs concessions. The document imposed a ban on granting individual benefits, i.e. granting tax exemptions to specific individuals.

It should be noted that the share of tax revenues in total state budget revenues rose to nearly 80%in the first quarter of this year. Revenues for this period over-fulfilled by 4.5%, the budget received 6.1 bln somoni. Previously the average annual share of tax revenues in the budget did not exceed 70%.