Taxman Squeezes Tajik Web Firms
Taxman Squeezes Tajik Web Firms
Internet providers in Tajikistan are warning that extra taxes could force many firms out of business, and stifle the growth of this emerging industry.
In additional to the usual business taxes, internet providers have, since the beginning of this year, been subject to an excise duty payable on services.
Although the poorest of the Central Asian states, Tajikistan has seen a remarkable rise in web provision in recent years, with over ten firms providing services that – at least until effects of the new levy are felt – have been relatively affordable. Two million of the republic’s seven million-odd people subscribe to internet services.
At a recent meeting in the capital Dushanbe, IT company representatives and consumer rights experts argued their case against officials.
The excise duty came into force after the tax service changed the rules to categorise internet services as a form of mobile communications, on which the payment is charged.
At the meeting, Rovshan Valomatzoda of the Intercom firm argued that this definition was a nonsense, since web services do not in themselves constitute a form of telecommunications, unlike, say, mobile phones.
Many believe it is the sheer success of internet businesses that attracted the taxman – they hold out the promise of substantial revenues.
Konstantin Bondarenko of the Centre for the Free Market says the additional tax comes at a time when many firms are only just keeping their heads above water. He says the tax authority could at least have delayed the measure for a year to give IT companies a chance to adapt.
One of the main arguments against extracting more money from internet providers is that it is short-sighted. Tajikistan stands to lose much of the progress it has made in recent years. The internet is seen as key to economic development, education, and communication between remote regions of this mountainous country.
“When we introduce excise duties, services become more expensive, and we quite simply slam the brakes on the development process,” Rustam Qosimov of Tajikistan’s Internet Foundation said. “The level of internet penetration is an indicator of a state’s development.”
The tax service representative at the meeting, Davron Qurbonaliev, put up a robust defence, insisting that the statistics did not bear out claims that web subscriptions had fallen because of the change.
Opponents of the tax are planning to fight it in court. They may have an ally – Tajikistan’s official anti-monopoly commission seems to believe the tax service has got it wrong.
The audio programme, in Russian and Tajik, went out on national radio stations in Tajikistan, as part of IWPR project work funded by the Norwegian Ministry of Foreign Affairs.
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