Tajikistan 2018

2016 have strengthened further the role of the president, removed limitations to his term in office, and also introduced a ban on the establishment of faith-based political parties, thence clearly targeting the Islamic Renaissance Party (IRPT), which once had stood as the opposition but was later, in 2015, declared by the state as a terrorist organization. Many leaders of the IRPT remain behind bars. A solicitor defending IPRT in the court of law was convicted to 28 years in prison on dubious charges. Constitutional referendum also lowered the age limit for taking the presidential position, in a move allegedly done in order to allow president Rahmon’s son to have run at the presidential elections in 2020.

political and military elite.

by the authorities. Legal amendments were adopted by the parliament in July 2017, allowing authorities to legally access the contents of online activities. Objective reporting is hardly found and mostly reserved for the media outlets residing abroad. In 2016, a law was introduced, that allowed the State Committee on Television and Radio to censorship the content of both private and public media outlets. * Press freedom score will be updated after data from primary source have been published. For more information see Methodology section.

ruling family, widespread bribing also distorts the entire justice system.

21/100 points (of all post-Soviet and all OSCE countries, only Turkmenistan is worse). In Freedom House`s NiT 2018, its corruption score fell from (negative) 6.75 to 7.00 points (of possible 7), meaning that it can`t be worse.

theology abroad. Non-Muslim religious groups are occasionally persecuted. Trade unions are de facto dependent on authorities. Freedom House notes that “sexual harassment, discrimination, and violence against women are common, but cases are underreported and seldom adequately investigated”. Women suffer government and societal pressure to abandon foreign fashion (be it hijab or a Western-style dress) and stick to traditional folk dressing codes. LGBTs are free of criminalization but not free of stigmatization by authorities and of black-listing by the police. Black lists thereof are occasionally updated after round-ups in clubs or in the streets, now seemingly encompassing at least 367 names. The position of the biggest - Uzbek - ethno-linguistic (and to a degree religious) minority was for long marked by mistrust and sidelining. With recently improved relations between Tajikistan and Uzbekistan, that might change.

the role of Third Party Arbitration Courts was brought to minimum. At the same time, clientele networks, nepotism and corruption among public officials are widespread, which basically undermines the liberal stance towards foreign investments. All land in Tajikistan is in state ownership, and it cannot be sold or bought - only first and second tier land use rights can be leased: to Tajik natural persons and companies indefinitely, while to foreign entities for up to 50 years. Weak performance of the land registry diminishes security of land use rights in the agricultural sector. Property registration is a slow process coupled with high fees. Insolvency regulations also lead to long processes, which can last up to two years and result in recovery of only one third of the claim.

large infrastructure projects whereby the public debt will surpass 50% in 2018. There were negotiations regarding an IMF support program, but it has not yet been agreed upon. The role of the state in the economy is still considerable, with numerous big state-owned companies active in many fields, even in those where state interference is mostly obsolete, such as finances, food processing and mining. The most important SOEs are industrial facilities such as the largest company in the country, the aluminum company Talco. SOEs are in a de facto preferential position, since they receive a large share of government procurements, and are also financed by banks via preferential loans that could be either waived or taken over by the government, making them more a subsidy than a loan. Many of these SOEs have reported high financial losses during the previous years, which burdens public finances. SOEs` management is not professional, due to strong political influences from the government, while being a strong part of the clientele network. The split of the national electric company, the Barqi-Tojik, into three companies, one each for generation, transmission and distribution, has not yet been accomplished. Tajikistan is in the process of shifting to International Financial Reporting Standards (IFRS), while in the meantime SOEs are using the national accounting standards which deviate from the best international practice. The share of non-performing loans (NPL) stood at more than 35% at the end of 2017, officially, but non-official estimates reported this to be much higher, which not only showed that the banking system was in crisis but could have strong fiscal consequences in case of bank bailouts. Personal income tax is progressive, with rates of 8% and 13% and a low non-taxable threshold. Corporate income tax is also progressive, with the rates of 13% and 23% - the lower rate is attributed to companies that produce commodities. Both rates were decreased by 1 percentage point from their previous level in January 2017. VAT stands at 18%. High social security contributions paid by the employer, coupled with the income tax, lead to a moderate labour tax wedge of 30% on the average wage in the country.

to get a construction permit. Getting electricity is very expensive, and the year 2017 was the first year in which the government was able to provide year-round electricity to households and businesses across the country, since electricity shortages were common. On the other hand, starting a business has been relatively quick and without the paid-in capital, but expensive. The recent increase in revenue threshold for VAT registration was also a positive step for small businesses. Foreign currency regulation, high inflation and tax rates are most often considered as obstacles to a better business environment in the country. Labour regulations are mostly rigid: fixed term contracts are prohibited for permanent tasks, but there is no limit on their length. Working hours are not flexible, with high wage premiums for non-standard hours. There are complex regulations regarding redundancy, with priority rules and reassignment obligations, but notice periods and severance pay remain flat and do not increase with years in tenure. Trade unions are weak and mostly concentrated in the public sector, but also controlled by the government. Collective bargaining in the country is rare. The minimum wage is rather low in comparison to the average one, thus not bringing too much distortion into the economy. There is a legal requirement that at least 70% of the workforce must be local (and 75% if the CEO is a foreign national, or 80% or even 90% for projects financed by the Tajikistani government).

declarations can be done electronically, Tajikistani foreign trade procedures are burdensome, requiring numerous working hours and as many as 13 different documents to export. Arbitrary trade policy is also sometimes used in violation of the WTO rules, such as the ban on imported chicken meat from 2017. Obstacles in movement of goods are complemented by capital controls, which are used to maintain the exchange rate of the national currency, the somoni, which further devaluated from 8.8 to 9.4 per USD. Since 2017, these capital restrictions have been even increased, and large transactions in foreign currency are difficult to conduct. Tajikistan is still considering joining the Eurasian Economic Union, which would open Russian labour market further to local foreign workers, but would also lead to restrictions in trade with other countries. Procedures for obtaining residence permits for foreign nationals are also burdensome and provide for only up to one year of residence.