IFC Survey Shows Progress on Tajikistan Inspections and Licensing and Reform, Challenges Remain
Implementation of a 2006 Inspections Law is saving small and medium enterprises in Tajikistan a total of $9.3 million annually, according to the IFC 2009 report on SMEs.
But administrative costs, particularly for business registration, permits, and compulsory certification, are rising for SMEs registered as legal entities.
The report, Business Environment in Tajikistan as Seen by Small and Medium Enterprises 2009, is based on a survey of about 1,500 businesses throughout Tajikistan. IFC carried out comparable surveys in the country in 2003 and 2006, allowing for meaningful comparisons of the investment climate over time.
Mr. Saidov D., Chairman of State Investments and State Property Management Committee of Tajikistan said, “In September, the World Bank Doing Business report identified Tajikistan as a ‘top 10 reformer.’ Today’s IFC survey confirms our country’s progress in supporting the private sector through reform.”
Access to finance remains one of the top challenges for Tajik SMEs, especially for dehkan farms. Yet from 2002 to 2007 the business environment improved for SMEs in several ways. For example, implementation of the 2004 Licensing Law lessened the burden of licenses for SMEs.
“The $9.3 million in private sector savings from inspections reform has exceeded our expectations, but a lot more work remains to be done to address other key business challenges like tax reform,” said Wendy Werner, IFC Country Officer for Tajikistan.
New entrepreneurial activity in the SME sector is concentrated in the individual entrepreneur and dehkan farm categories. There is less growth among SMEs registered as legal entities, due largely to a challenging business environment. These small and medium companies report paying 12 percent of sales informally to public officials to resolve issues related to customs, taxes, licenses, and other administrative procedures.
Key survey recommendations include eliminating unnecessary steps in the registration process, increasing transparency in licensing, undertaking comprehensive permit reform, implementing risk assessment for inspections and tax audit, making certification optional for low- risk categories of goods and services, and simplifying import/export procedures.
The complete sets of results of the IFC SME surveys in Tajikistan are available to download (SME Survey 2009, SME Survey 2006, SME Survey 2003).
Doing Business
The Project is collaborating with the "Doing Business", a joint project of IFC and World Bank assessing regulatory environment in more than 150 countries around the world. In particular, project coordinates the collection of the data for "Doing Business 2009" report in Tajikistan. In addition project is closely involved in first time regional study "Central Asia Doing Business 2008". The study is to be finalized and presented in capitals of four Central Asian countries (Kazakhstan, Kyrgyz Republic, Tajikistan and Uzbekistan) by mid of 2008. Main goal of this study to assess the administrative procedures, identify areas of improvement and enable experience exchange among countries of the region. Find more information on Doing Business survey...
