The Price of Water

The Tajik parliament has approved changes to tax legislation to make hydroelectric power stations pay a tariff for the water they use.

The Price of Water

The Tajik parliament has approved changes to tax legislation to make hydroelectric power stations pay a tariff for the water they use.

Friday, 6 March, 2009
Those behind the bill argue that charging for natural water resources is common throughout the world, and that the cash-strapped Tajik government cannot afford to miss out on this source of revenue.



Economists warn that the “water tax” will force the national power company to charge more for electricity – already an expensive item for many people in Tajikistan, when it is actually available amid the frequent blackouts.



“It will naturally translate into increased electricity charges,” said economist Ashirboy Saliev. “Indirect taxes always increase the price of a commodity. Barq-i Tojik [power company] will pay more in taxes, so it will raise electricity prices to cover this.”



Mahmadhoja Narzulloev of the industry and energy ministry argues that the impact of the water tax will be insignificant in the overall context of the substantial rises in electricity charges that take place every year.



Some politicians argue that the government should also consider charging neighbouring Uzbekistan for the water that reaches it from rivers like the Amu Darya which arise in Tajikistan. They argue that this would be only fair, as Tajik hydroelectric dams double up as water regulation systems for all the countries through which rivers run, and these are in dire need of repair.



As Saliev points out, attempting to levy such a fee on the Uzbeks could be counter-productive. “The poor relationship we have now could get even worse,” he said.



The new water tax will also affect people in a more direct way – the alcohol and soft drinks industries will be charged for the water they use, too, and this will be passed on to the consumer. Drinking water will remain free.

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