Tajikistan: With e-wallets scuppered, shoppers more stranded than ever

Visa and MasterCard long ago stopped working, so there are few options for shopping online.

A recent desperate and quixotic measure by Tajikistan’s government to boost budget revenues has forced the local population into almost total international financial isolation.

For a couple of months now, it has not been possible in Tajikistan to use payment terminals to top up e-wallet accounts. In case of need, anybody using such online services has been forced to ask friends and family living abroad to top up their balance. 

The impasse has it roots in the contents of a letter written last year by the chairman of the tax committee to the president. The appeal, the contents of which were published by local media in December, essentially argued that the government needed to find new sources with which to “top up the state budget.”

One option suggested by the taxman, Nusratullo Davlatzoda, was to demand payment of taxes from multinational corporations like Google, Apple, Microsoft, Facebook, eBay, AliExpress and Yahoo. His broader point was that online commerce was robbing the local treasury of valuable revenue. When Tajik consumers buy airline tickets, books and household items or book hotels online, they only generate profit for foreign companies, Davlatzoda said.

“The time has come to adopt measures on the regulation of operations carried out through the internet. We need to introduce changes to tax legislation that would envision the payment of sales tax for foreign companies offering services to customers by electronic means,” he said.

In the end, however, the solution has proven far less sophisticated.

Under a law adopted in March 2017, companies servicing cash transfers to e-wallets were required to re-register and this time to do so through domestic banks. Many of the companies duly tried to comply but were told they had failed to submit the proper documents. In February, this failure to register was cited by the National Bank as grounds to halt payments to e-wallets. Officials have said the revised rules on registration were needed to increase transparency, combat money-laundering and to prevent the financing of terrorism.

If the services of e-wallet companies like Qiwi, Yandex.Money and WebMoney have become so popular in Tajikistan, it is because there are few other options for making payments to companies based overseas. Many domestic banks have neglected to properly maintain their correspondent accounts — the formal system whereby financial entities are able to handle operations for other institutions — leading to companies like Visa and MasterCard ceasing to provide their services. The local bank card system is useless for international transactions.

This is a discouraging development for Tajik consumers, who are offered little by way of choice by the local retailers from whom the government is hoping to levy growing volumes of sales tax. Small and medium entrepreneurs aspiring to cater to demand for sought-after goods currently unavailable on the domestic market are often unable because of a constellation of difficulties. Those include bureaucracy, logistical costs, corruption and the ominous and very real prospect that their successful business could eventually be seized by powerful individuals with close ties to the national leadership.

Accordingly, many had, until a couple of months ago, turned to online retailers, typically ones based in China, but that option has too now been foreclosed.

Tajikistan: With e-wallets scuppered, shoppers more stranded than ever

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