On June 13, entrepreneurs of small and medium businesses gathered for a protest in front of the main building of the Tax Committee in Dushanbe. About 200 entrepreneurs, largely representatives of the local markets and small shops, protested the tax increase, which doubles their tax burdens starting in June 2008. Tax rates for individual entrepreneurs operating without legal person/entity registration was increased by 110 percent and threatens to bring to insolvency many owners of shops and private entrepreneurs in the local markets.

A number of serious changes and amendments were made to the national Tax Code in early April, 2008. More than 70 different articles of the Tax Code were altered, mostly touching the areas of VAT, taxation of individual entrepreneurs, excise and social taxes, conduct of tax accounting, tax privileges and impressments. While authorities of the Tax Committee have hurried to term the new document an upshot of widespread discussions and compromises, the Tax Code remains confusing to the majority of entrepreneurs, has some articles intentionally unclear, and demands even greater taxes from what are already suffocating entrepreneurs.

During the protest on June 13, private entrepreneurs complained about the excessive increase of taxes, the tyranny of the tax authorities, the endless check-ups and extortions. Until May 2008, the monthly tax payment for individual entrepreneurs selling goods in markets and shops averaged 350-400 Somoni ($100-125); with the April amendments to the Tax Code and the new government regulation “On ratification of rules that grant patent and license to register private entrepreneurs that act without being recorded as a legal person/entity”, this sum doubled to 700-800 Somoni ($200-230). This sharp increase in tax rates has sparked a protest among entrepreneurs who have demanded that the Tax Committee decrease taxes and let people work and support their families in the harsh economic crisis that Tajikistan currently experiences.

Authorities of the Tax Committee have responded by organizing a roundtable with the protesters throughout which major complains were aired and discussed. Protesters were advised to conduct their businesses in accordance with the law, to calculate and register their income and expenditure, to pay taxes based on profits made. Tax authorities have also promised to find and punish corrupt tax inspectors who collect taxes in the markets and to report the demand of the protesters to decrease taxes to the government until July 1, 2008. However, it is a well known fact that several months, if not years are necessary for such procedures in Tajikistan. Thus people left the protest dissatisfied and with virtually no hope that the tax decrease will occur. Instead, they have to cope with the new taxes and somehow continue to make their living.

Experts from the Tax Committee itself acknowledge that the new changes in the Tax Code have brought a substantial increase in taxes as well, while bringing some advantages to the entrepreneurs in the form of easier business registration and less paperwork involved in filing taxes. In fact, the high tax rates are often only half of the misfortune, because many who pay all taxes in full and try to be law-abiding in order to not face corrupt officials whose demands are always increasing, are still forced to provide bribes, because they are constantly threatened to have their businesses shut down. Tax inspectors, when requesting bribes, often refer to the Tax Code itself and to its articles, many of which are unclear and leave room for tax authorities to interpret and reinterpret the law in different ways, and thus increase tax rates whichever way they want. Moreover, very often it happens that one's business is located in a small city, which involves local taxes and bribes to the city authorities, but then regional or national level tax authorities arrive, with their own check-ups, and the entrepreneur is forced to give money away once more. So, entrepreneurs pay both numerous taxes and various levels of bribes and there seems to be no relief in sight. Instead, jaded entrepreneurs brought to the gridlock, hopelessly explain that everyone (including tax inspectors and authorities) have to eat and feed their families in poverty-stricken Tajikistan.

During the protest on June 13, many entrepreneurs complained and threatened to leave their businesses and close the grocery and clothes stores where they work. Indeed, many see that the only way to support their families is to migrate for work to another country. In this light, it is interesting to note that Tajik migration is experiencing a new wave, mostly in the aftermath of the severe energy crises of the last two winters. In fact, poor people and unskilled labor used to migrate to the Russian Federation and other neighboring countries in previous years – but now it is the richer and more skilled strata of Tajik society that seem in a hurry to leave their home country, where life is becoming constantly more unbearable, one piece of legislation at a time.