DUSHANBE, November 29, 2011, Asia-Plus  -- Imposition of excise tax on Internet providers'' services will lead to increase in the Internet service prices, Konstantin Bondarenko, the head of the Tajikistan’s Free Market Center, noted at a meeting in Dushanbe on November 28.

The meeting to discuss issues related to imposition of an excise tax on Internet-providers’ services in Tajikistan and consequences of that was organized by the Association of Internet-Providers of Tajikistan in cooperation with Tajikistan’s Free Market Center.

Under the instruction of the Tax Committee under the Government of Tajikistan, Internet providers now have to pay a 3-percent excise tax for the period beginning from January 1, 2011.

“It means that they will lose a large amount of money at once that is a serious problem for them,” Bondarenko stressed.

According to him, Internet providers will have to adjust their prices beginning on January 1, 2012 in order to recoup their losses.  “Increase in service prices will lead to decrease in demand for their services,” said the Free Market Center director.  “Besides, Internet providers invest in their development due to their revenues.  Decrease in revenues will lead to decrease in investments that, in turn, will lead to technological backlog of Internet companies in the country.” 

Meanwhile, representative of the Tax Committee, Davron Qurbonaliyev, noted that Internet was one of subtypes of mobile communications.  According to him, imposition of the excise tax on cellular communications services did not affect the number of subscribers to the mobile phone operators.

“Besides, this instruction has been posted on the Tax Committee official website and has been published in the Tax Committee’s official newspaper Boju Khiroj ,” said the Tax Committee representative.  “Therefore, representatives of Internet providers were to be aware of this instruction.”

We will recall that Tajikistan imposed a 3 percent excise tax on mobile phone services on January 1, 2011.  Following imposition of excise tax on cellular communications services, mobile phone operators in Tajikistan raised fees for their services by 3 percent starting on February 1, 2011.

Tajikistan also already charges excise taxes on alcohol, tobacco and tobacco substitutes, fuel, tires and vehicles.