In a bid to generate fresh revenue, the authorities in Tajikistan have begun charging motorists a vehicle-scrapping tax.
Under a new law approved last month but only made public this week, the one-off tax, which is being dubbed a recycling fee, will be collected upon registration of a new vehicle or, for those vehicles already in circulation, during scheduled mandatory technical inspections.
The money will ostensibly be used to cover the cost of scrapping vehicles in a environmentally friendly manner once they are taken off the road.
The amount to be paid by motorists varies in accordance with the type of vehicle and will range from $32 to $261.
Finance Minister Faiziddin Kahorzoda has billed the recycling fee a necessity for ensuring ecological safety, promoting public health, minimizing the impact of waste, and, not least, as a way to boost state revenues.
As of early 2023, there were 600,000 registered vehicles circulating in Tajikistan. The tax accordingly stands to generate several dozen million dollars for the government’s coffers.
Kahorzoda said the experience of Uzbekistan, Kyrgyzstan, Kazakhstan, Belarus, and Russia had been studied in drawing up this tariff.
The precedent of Kazakhstan is not perhaps the most felicitous for Kahorzoda to have alluded to, however. The state-imposed recycling fee there became the focus of a long-running political scandal when it emerged that Operator ROP, the government-appointed monopolist tasked with handling the scheme, belonged to a daughter of former leader President Nursultan Nazarbayev. In February 2022, President Kassym-Jomart Tokayev submitted to public pressure and ordered the dissolution of the monopoly, which motorists had blamed for a surge in car prices.
It is not yet known who will be charged with handling the vehicle recycling initiative in Tajikistan.
The problem of flagging government revenue is one that has been weighing heavily on the mind of President Emomali Rahmon. Speaking at a government meeting on January 24, he said that the budget had been deprived of 170 million somoni ($15.5 million) of due payments because of the delinquent conduct of major tax debtors.
He identified aluminum company Talco, as well as Talco Gold, which is a joint venture with China’s Tibet Huayu Mining, Sangtuda-1 hydroelectric power plant and mobile telecommunications companies as the leading culprits. Several of the entities mentioned by Rahmon are known to be controlled or owned by members of his extended family.
While those companies are likely to get away with short-changing the state, notwithstanding the public rebuke from Rahmon, motorists may not be so lucky.