Tajikistan: Private Sector Abuses to be Curbed

Government pledges to stop private companies ripping off the state and abusing their workforce.

Tajikistan: Private Sector Abuses to be Curbed

Government pledges to stop private companies ripping off the state and abusing their workforce.

The lack of state control over the private sector has led to massive corporate tax dodging and deprived workers of their basic rights.

The authorities are now drafting a series of reforms, which should help to tackle such abuses. Alikhon Khusainov, the deputy head of the state tax department, has told the media that the new proposals are currently waiting to be examined by parliament.

"Reforms are the only way forward," independent political scientist Rustam Samiev told IWPR. "Violations of the country's labour legislation can be seen almost everywhere. These concern the payment of salaries, time off, working hours and so-called double-entry book-keeping."

Many firms practise the latter, which involves having two payrolls. One is shown to the tax authorities, while the other, unofficial, one reflects the true salary level.

Entrepreneurs blame Tajikistan's high income tax rates and the compulsory deductions towards the social welfare fund. "It is completely unprofitable for us to show the real salaries, because around half of the money earned will only end up going to the taxman," said one businessman.

"If that happens, my employees will only receive half of their salaries, and we'll also lose money - so it's not in anyone's interests."

Salaries lower that two somoni (70 US cents) are untaxed, while those up to 200 somoni are taxed at ten per cent. This rises to 15 and 20 per cent for higher wages.

Analysts believe that this system, which was passed in 2002, has too many drawbacks. Officials from the ministry for labour and social welfare think that the low wage level set for untaxed income has encouraged many companies to practise double-entry book-keeping.

Raisa Shelaeva, who heads the government department for organising payment and regulating labour, told IWPR that the problem stems from the fact that the untaxed minimum has remained the same despite the increase in the minimum wage from two to five somoni over the last few years.

Employers are now doing everything they can to save money, from depriving their workers of holiday and sick pay, to bribing auditors appointed to check their accounts.

"Last year I fell seriously ill, but my boss refused to give me sick leave," said Ravshan Babajanov, an employee of a trade firm. "As a result I had to miss two working weeks without permission, for which I was given a harsh reprimand and deprived of a month's salary."

Babajanov told IWPR that there was little point in complaining about such abuses, as there is little state control over workers' rights in the private sector. "Besides, how could I claim for compensation if there is no official record of my salary?" he said. "I would only get into an argument with my boss and lose a good job."

Even those lucky enough to get jobs with international organisations end up encountering problems.

"(Western) organisations are not liable to local taxation," said Samiev. "This also applies to deductions to the social welfare fund. As a result, their local employees are left with a blank spot in their career, which can deprive them of the right to receive government benefits when they reach retirement age."

Samiev says many such workers are forced to moonlight for local employers simply to keep up their tax and welfare record.

Analysts believe that employers are getting away with all manner of abuses because Tajikistan's terrible poverty and high unemployment rate - a third of the male population goes abroad every year to find temporary work - has left its workers desperate to cling onto any kind of job.

Zafar Abdullaev is an independent journalist in Tajikistan.

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