SME Legal Environment Meeting Minutes, August 9, 2006

August 9, 2006 – 14.00-15:30 - IFC Private Enterprise Partnership Tajikistan Office

LAW ON INSPECTIONS

According to the agenda Andrea Dall’Olio made an overview presentation on the Inspections Law adopted on July 28, 2006 and is now in force starting August 10, 2006 (after its official publication in media). IFC SME Survey and Policy Project in Tajikistan supported the Government in drafting the above Law which for the first time regulates majority of state inspections of businesses regardless of their size, registration form and type of activity.
In general the law, on one side, is radical and restrictive for inspecting bodies and, on the other side, is simple and detailed for businesses.
It provides an exhaustive list of authorized inspecting agencies as well as the topic of their inspection, defines and limits frequency and duration of each inspection, clearly details rights and duties of both businesses and inspectors/inspectorates, and describes procedures/rules for conducting inspection.
Tax inspections are not covered by the given law and regulated by the Tax Code, the similar amendments to which were adopted along with the Law on inspections. It should be noted that any changes to the list of inspecting bodies can be made through amendment to the Law only.
The Law forbids any duplicating inspections as well as suspension of business activity during the inspection process.
There is also an agreement with the Government on including a chapter on sanctions for violating the Law into the Administrative Violations Code and the IFC SME project is now working on this.
As a next step IFC plans to continue providing assistance in implementing the Law which includes:

• improving the legislation in compliance with the Law on Inspections
• improving/simplifying internal regulations of selected inspecting agencies
• distributing information, including trainings on informing entrepreneurs on their rights.

(Presentation is attached to this document)

PRINCIPALS COORDINATION AND THE UN WEBSITES

Then the floor was given to Madina Rakhmanova who outlined participants on the websites of UNCU's Principals Coordination (www.untj.org/principals) and UN Coordination Unit in Tajikistan (www. untj.org). The presentation informed about the structure of the website, main topics, posted information as well as instructions on finding needed materials.
For details refer to attached the presentation.

OTHER ISSUES

1. Amendments into the Tax Code. The proposed amendments were prepared by the Ministry of State Revenues and Duties and the most concerning are the following:
• Introduction of a new tax on production factors (replacing tax on road users);
• Changes into land tax rates;
• Changes into the tax rate of unified tax for agricultural producers.

It was proposed to:

• organize a discussion with tax as well as sectoral experts to get their view and feedback;
• meet and discuss the proposed changes with IMF consultants;
• circulate the draft amendments among SME Legal Environment Working Group members for comments/suggestions to be sent back within a short time (max. 2 weeks).
2. Tajikistan WTO accession. Following a meeting on WTO accession in Swiss Office recently it was suggested by Aziz Khaidarov that SME Legal Environment Working Group join or coordinate with WTO Coordination group to discuss the main related issues.
3. Status of the Poverty Reduction Strategy Paper for 2007-2009. Aziz Khaidarov informed participants that there is a Government working group on drafting the second strategy headed by Mr. Jabborov Khushvakt, Ministry of Economy and Trade. The first draft is ready and the working group is planning to initiate discussion of some chapters with interested parties. It was therefore proposed that some of SME Legal Environment Working Group members attend the discussion. In the meantime it is expected that World Bank HQ Consultants organize a monthly(two months) visit to Tajikistan to assist the Government in finalizing the Strategy which is envisioned to be ready by mid. Novermber 2006. The draft PRSP can be downloaded at: www. untj.org.

At the end Florentin Blanc thanked participants for their time and active discussions and proposed that Andrea Dall’Olio chair next meetings as he is moving to Ukraine to lead IFC SME Development Project there.

List of participants:

Minutes taken by Manizha Sharifova, IFC Tajikistan SME Survey and Policy Project