Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Tajikistan

Abstract

Request for Disbursement under the Rapid Credit Facility-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Tajikistan

This statement provides information that has become available since the staff report was finalized. This information does not alter the thrust of the staff appraisal.

VAT exemptions. Since the Letter of Intent was signed, Parliament has approved VAT exemptions for construction materials for 10 guest houses, and for the import of flowers and silkworms. These exemptions were submitted to Parliament a few months ago and only now have been approved. They have not yet been signed by the President. While likely to not be quantitatively large, the exemptions are inconsistent with the authorities’ commitment in the LOI to refrain from granting new tax incentives. The authorities recognize this and have provided written assurances that they will identify and implement offsetting measures to keep the 2020 budget deficit at the agreed level. The offsetting measures will not impact health or COVID related spending. The authorities have also reaffirmed their commitment to not provide any new tax incentives or exemptions.