Institute for War and Peace Reporting | Giving Voice, Driving Change

Tajik Traders Protest Fee Hike

In a remote and poor region, female traders are up in arms about a new levy imposed by government.
By IWPR Central Asia
Every morning, despite the cold, 50-year-old Begim Saidova loads up her barrow with goods and takes it to the central market in Khorog, the main town of the mountainous province of Badakhshan in southeast Tajikistan.

She is lucky because she lives fairly close to the market, unlike many other traders who have to walk many kilometers over mountain tracks to get there.

Saidova started trading in basic consumer goods several years ago, when she was widowed and left with two children to look after. After borrowing the equivalent of 1,000 US dollars from a bank as start-up capital, she began trading to eke out a living.

But hers is no capitalist success story. Each month, she barely turns a profit from her backbreaking work, what with repaying her loan, renting a market stall and travelling to and from the distant Tajik capital Dushanbe where she buys her wares wholesale.

When reports reached Khorog of an imminent hike in the fee that traders pay to operate legally, women like Saidova were naturally concerned.

On February 5, about 500 women working as market traders in Khorog staged a protest outside the local government offices against plans to introduce a much more expensive trading license than the current one, warning that this would put them out of business.

The women currently pay 46 somoni, about 13 dollars, a month for the right to trade at the market, but they have heard that the authorities want to charge them 350 somoni, equivalent to more than 100 dollars.

After the mayor, Nazarbegim Muborakshoeva, came out to talk to the enraged women, she promised a special commission would investigate the matter and give them a firm answer.

Such was the level of concern in the area that two days after the demonstration, the television station in Khorog held a live debate with local tax officials, who did not say when the changes would come into effect.

So far, the license fees have remained unchanged, but the traders still fear hefty rises are around the corner.

Trading licenses are obligatory for all market traders in Tajikistan. Obtained from the local tax office, they serve both as a work permit and as proof that the holder has paid a fixed business tax.

Nusratullo Davlatov, deputy head of the Tajikistan’s tax agency, says the idea of a so-called “super-license” was put forward by the International Finance Corporation, IFC, a wing of the World Bank, and is now under review in the Ministry of Finance.

The idea is to incorporate three other levies now paid separately – income tax, sales tax and welfare contributions – into the license fee.

“The tax collection system will thus be simplified and that is good both for taxpayers and the tax agencies,” said Davlatov.

IFC representatives told IWPR that the new unified payment should cut the administrative overheads of tax collection and make the system more transparent. The new fee should not amount to significantly more than what traders are already paying as separate taxes, and should make it easier to start up a business, they said.

Bahor Kamarov, deputy head of private-sector studies at the Centre for Strategic Studies, which is attached to the Tajik president’s office, supports the proposal in principle but says the sales-tax component of the new license fee must be adjusted according to traders’ ability to pay and where they live.

Badakhshan is a case in point. One of the poorest and least developed regions in Tajikistan, there is little money around to pay higher taxes. High unemployment rates force many men to leave for temporary jobs in Russia and elsewhere, and about half the 2,000 traders registered in Khorog are female.

The women say they have few other options. “With so much unemployment and the constant price rises for essential foods, the only chance for many women and their families to survive is by trading at the market,” said one trader, who gave her first name as Saida.

Like her colleagues, Saida is hoping the talk of expensive new licenses is no more than a rumour. But Begim Saidova is seriously worried about the possibility. She has her two school-age children to feed and clothe, and one of them needs medical treatment. For her, paying more for a trading license would imperil the family’s survival.

“If the price of a license goes up, we will have to raise the prices of our goods accordingly, but who’s going to buy them?” she asked. “Prices have already hit the pockets of customers, and unfortunately people here are very poor.”

Iftikhor Mirshakar is chief editor of the Pamir-Media news agency. Jamila Majidova is a correspondent for the Central Asia and Caucasus journal.