Dushanbe, Tajikistan, December 16, 2009—Implementation
of a 2006 Inspections Law is saving small and medium enterprises in Tajikistan
a total of $9.3 million annually, according to a new survey of SMEs by
IFC, a member of the World Bank Group.
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
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 survey
report is available at www.ifc.org/tajikistan/sme.
The IFC Business Enabling Environment Project is funded by the Swiss State
Secretariat for Economic Affairs and the United Kingdom’s Department for
IFC is the only international financial institution focused exclusively
on the private sector, the engine of sustainable development in emerging
markets. Along with the IBRD, it is currently seeking a capital increase
to strengthen its ability to create opportunity for the poor in developing
countries—including by improving the investment climate in Tajikistan
and the wider region.
IFC, a member of the World Bank Group,
creates opportunity for people to escape poverty and improve their lives.
We foster sustainable economic growth n developing countries by supporting
private sector development, mobilizing private capital, and providing advisory
and risk mitigation services to businesses and governments. Our new investments
totaled $14.5 billion in fiscal 2009, helping channel capital into developing
countries during the financial crisis. For more information, visit www.ifc.org.
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