WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/ACC/TJK/25 
4 July 2012 
 (12-3584) 
Working Party on the Accession  
of the Republic of Tajikistan Original:   English 
 
 
 
 
ACCESSION OF THE REPUBLIC OF TAJIKISTAN 
 
Draft Notification Pursuant to Article XVI:1 of the GATT 1994 and  
Article 25 of the Agreement on S ubsidies and Countervailing Measures 
 
  The following submission, dated 27 June 2012, is  being circulated at the request of the 
Delegation of the Republic of Tajikistan.  
_______________ 
 
 WT/ACC/TJK/25 
Page 2 
 
 
 I. Incentives for investments in the Free Econ omic Zones not contingent upon local content 
or export performance requirements 
1. Title of the programme 
Incentives provided for enterprises operating in the Free Economic Zones (subjects of 
Free Economic Zones) not contingent upon expor t performance or use of domestic products. 
2. Period covered by the notification   
Period covered by the notification is 2011 calendar year. 
3. Policy objective and/or purposes of the programme 
 - Developing socio-economic potential of the country and its certain regions and 
territories; 
- Providing favorable conditions for attracting investments in the real sector of 
economy; 
- Creating new jobs; - Attracting modern equipment and innovative technologies; - Creating and Developing modern transport,  production and social infrastructure; and 
- Improving the quality of management, ensuring the production efficiency, etc.  
3. Background and authority for the program 
 (a) Background:  - The Law "On Free Economic Zones" of th e Republic of Tajikistan No. 700, dated 
25 March 2011. 
 (b) Authority: 
 - Sughd Free Economic Zone Administrative Authority; 
 - Pyanj Free Economic Zone Administrative Authority;  - Ishkoshim Free Economic Zone Administrative Authority; and  - Dangara Free Economic Z one Administrative Authority. 
4. Form of the subsidy 
 - Exemptions from all taxes defined by th e Tax Code of the Republic of Tajikistan 
except for social tax and personal income tax; and 
 - Customs duty exemptions. 
5. To whom and how the subsidy is provided 
 (a) Eligibility: 
 Available to all subjects of Free Economic Zones (FEZ).  Activities of subjects of FEZ that 
are conducted outside of the FEZ territory are not subject to exemptions and general rules of 
taxation that are applicable to the rest of the country will apply to such activities.    WT/ACC/TJK/25 
 Page 3 
 
 
  (b) How the subsidy is provided: 
 - Persons wishing to operate in FEZ have to  conclude agreements with administrations 
of the respective FEZ for conducting activiti es on its territory.  Entrepreneurial 
activities within Free Economic Zones, regardless the form of ownership, are 
exempted from the following types of taxes provided for by Tax Code of the Republic 
of Tajikistan including:  
  - VAT; 
  - profit tax for juridical persons;   - land tax, tax for users of mineral resources; 
  - tax for users of roads; 
  - common tax for producers of agricultural products;   - sales tax (cotton-fiber and primary aluminum);   - minimum tax on income;   - tax from owners of means of transportation;   - state duties; 
  - tax for processed goods; and 
  - royalty on water and other compulsory charges. 
  The tax exemptions in FEZ do not apply to  Social tax and personal income tax and 
they must be paid under the same conditions applicable to the rest of the country. 
6.  Subsidy per unit, or in cases where this is  not possible, the total amount or the annual amount 
budgeted for that subsidy  
Provision of the subsidy per unit is not possible due to the nature of the tax exemption, which 
applies to all subjects of FEZ and any kind of  activities (including production) within the 
territory of FEZ.  The tax exemption, therefore,  is not product specific but applied all activities 
within a limited geographical area – territory of FEZ.  
7. Duration of the subsidy and/or any other time-limit attached to it, including date of 
inception/commencement.  
 As soon as right to operate in FEZ is granted - i.e. agreement with the Administration of FEZ 
is concluded, tax exemptions become automatica lly available to subjects of FEZ.  There are no 
time-limits for application of the tax exempti ons - subjects of FEZ can enjoy these benefits as 
long as they are operating within FEZ.  Free Economic Zones are being created for the 
duration of up to 50 years.  The duration of the Free Economic Zones can be prolonged on the 
basis of the decision of the Government of the Republic of Tajikistan.  Prolongation period for 
the subjects of FEZ cannot exceed the duration of the establishment of the Free Economic Zones.  WT/ACC/TJK/25 
Page 4 
 
 
 8. Statistic data permitting an assessment of the trade effects of the subsidy  
 The new Law "On Free Economic Zones" was adopted in 2011 and all of the four Free 
Economic Zones were established just  in recent few years.  Currently, in most of them the works 
are being undertaken to create necessary infra structure for operation.  Most advanced among 
these zones is FEZ "Soghd" with  17 registered subjects.  Th ese subjects are planning and 
implementing investments in the total amount of  about US$52 Million within 3 year period of 
their registration with FEZ.1  There are seven subject registered in FEZ "Dangara", whereas in 
FEZs "Pyanj" and "Ishkashim" – only two and zero subject are registered, respectively.  Thus, 
most of the FEZ as well as investments by subj ects in these zones are in the process of start-up 
and establishment.  Therefore, so far there are no determinable stat istics of production, 
consumption, imports and exports in these zones.  
                                                      
1 Source: Ministry of Economic Development and Trade of Tajikistan.   WT/ACC/TJK/25 
 Page 5 
 
 
 II. Subsidies for Tajik Aluminium Plant  
1. Title of the subsidy programme, if relevant, or brief description or identification of the subsidy 
 Electricity supplies to Tajik Aluminium Plant (TadAZ) at preferential rates. 
2. Period covered by the notification 
 Period covered is 2011 calendar year. 3. Policy objective and/or purpose of the subsidy 
The TadAZ was built during Soviet era and was designed for use of ra w materials from other 
and mostly distant parts of the Soviet Uni on.  With the collapse of the Soviet Union 
transportation costs have risen and logistics ha s become significantly more complicated - now 
with several countries to transit through.  There is  a threat of significant damage to the industry 
including likely closure of TadAZ.  In order to  compensate these losses, the Government of 
Tajikistan provides support in the form of pr eferential rates of elec tricity supply given the 
importance of TadAZ as one of the biggest em ployers in the country with high unemployment 
rate, and its contribution to the state revenue.   
4. Background and authority for the subsidy 
 (a) Background:  - Resolution of the Government of Taji kistan No. 259 of 19 May 2010 "On Seasonal 
Tariffs of Electric Energy for Certain C onsumers" (applied in 2011 but currently no 
longer in force); and 
 - Resolution of the Government of Tajiki stan No. 103 of 1 March 2012 "On Tariffs for 
Electric Energy and Heating". 
 (b) Authority:  - All rates are determined by Antimonopoly Ag ency of Tajikistan and subject to approval 
by the Government of Tajikistan; and 
 - "Barki Tojik" a state owned electric energy generating and distributing company 
supplies the electric energy according to tariffs established by  the Government.  
5. Form of the subsidy (i.e., gr ant, loan, tax concession, etc.) 
 Preferential rates establishe d for electric energy supplied to Tajik Aluminium Plant.  
6. To whom and how the subsidy is provided 
TadAZ is a manufacturer of primary aluminium in  Tajikistan.  National Electricity Company – 
"Barki Tojik" is obliged to sell electricity to TA P at rates fixed by the Government.  Such rates 
are revised by the Government from time to time.  According to Government Resolution 
No. 259 of 19 May 2010 "On Seasonal Tariffs of Electric Energy for Certain Consumers" the 
following rates2 per 1 KWh of electricity were appl ied for supplies to TadAZ in 2011: 
                                                      
2 Average exchange rate used for 2011 is US$1.00 = 4.61 Somoni.  WT/ACC/TJK/25 
Page 6 
 
 
  
Period TadAZ Other industrial and non-industrial 
consumers3 
From 1 May to 30 September (Summer season) US$0.011 (0.05 Somoni) US$0.046 (0.213 Somoni) 
From 1 October to 30 April 
(Winter season) US$0.018 (0.082 Somoni) US$0.046 (0.213 Somoni) 
 
Please note, however, that new re vised tariffs for electric ener gy supplies were established on 
1 March 2012 by the Resolution of the Government of Tajikistan No. 103 "On Tariffs for Electric 
Energy and Heating".  According to this re solution currently applied rates are as follows4:    
Period TadAZ Other industrial and non-industrial 
consumers 
From 1 May to 30 September 
(Summer season) US$0.013 (0.0625 Somoni) US$0.056 (0.2663 Somoni) 
From 1 October to 30 April 
(Winter season) US$0.021 (0.1025 Somoni) US$0.056 (0.2663 Somoni) 
 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy 
Approximately 5.48 Billion KWh of electric energy was consumed by TadAZ in the 
year 2011.  The approximate amount of subsidy for the year 2011 is calculated as follows5:   
 Amounts of Subsidy:    (a) Summer season: 2.28 Bln. KWh * US$0.035 (the difference between the rates 
US$0.046 – US$0.011) = US$79.8 Mln. 
 (b) Winter season: 3.2 Bln. KWh * US$0 .028 (the difference between the rates 
US$0.046 – US$0.018) = US$89.6 Mln.  
 Total subsidy:   (a)  US$79.8 Mln. + (b) US$89.6 Mln. = US$169.4 Mln. 
 Subsidy per unit:  
 Total amount of subsidy US$169.4 Mln divided by the total production of primary aluminium 
in 2011 of 278,400 tons = total subsidy per tonne is approximately US$608.5     
8. Products covered by the subsidy 
Electric energy at preferential rates is supplie d to the TadAZ irrespective of the types of 
products it produces.  However, primary aluminium is the main item produced by TadAZ 
making it almost all of the production output.   
                                                      
3 Established by the Government Re solution No. 678 of 29 December 2009. 
4 Exchange rate for the month of April 2012 is US$1.00 = 4.76 Somoni. 
5 For the purpose of calculation total amount of the electricity consumed has been divided into equal 
monthly amounts throughout the year.   WT/ACC/TJK/25 
 Page 7 
 
 
 9. Duration of the subsidy and/or any other time  limits attached to it, including date of 
inception/commencement 
There is no specific time-limit established for the duration fo r this subsidy.  Antimonopoly 
Agency with the approval of the Government may from time to time revise the tariff rates for 
electricity for different categories of consumers, including for TadAZ.    
10. Statistical data permitting an assessme nt of the trade effects of the subsidy 
TadAZ consumed 5.48 Bln. KWh. of electric energy in 2011 and 6.45 Bln. KWh in 2010.6   
Year Production 
(tons) Total amount of 
subsidy Amount of subsidy 
per unit (1 ton) Amount of preference in 
tariffs for electricity7 
2010 348,845 US$205.8 Million US$589.9 Summer:  US$0.035 
Winter:  US$0.031 (January to 
April) and US$0.028 (October to December)
8 
2011 278,400 US$169.4 Million US$608.5 Summer:  US$0.035 
Winter:  US$0.028 
 
                                                      
6 Source: Ministry of Economic Development and Trade. 
7 Rates indicated represent difference between the rates for TadAZ and other industrial and 
non-industrial consumers.  
8 Tariff rates have been changed in May 2010 by Resolution of the Government No. 259.  WT/ACC/TJK/25 
Page 8 
 
 
 III. Fiscal incentives to cotto n processing enterprises  
1. Title of the subsidy programme 
Exemption from payment of certain taxes fo r newly established enterprises engaging in 
full-cycle processing of cotton to final pr oduct (from cotton yarn to garments).   
2. Period covered by the notification 
 Calendar year 2011 is cove red by this notification. 
3. Policy objective and/or purpose of the subsidy 
Objective of this subsidy is  creation of jobs through stim ulating labour-intensive cotton 
processing industry.   
4. Background and authority for the subsidy 
 Legal basis:  
 - Chapter 50 of the Tax Code of Tajikistan; and 
 - Government Resolution No. 380 of 1 August 2008. 
 Authority:  - Government (Cabinet of Ministers) the Republic of Tajikistan takes decisions on 
granting these exemptions; 
 - Ministry of Finance – maintains regist er of the companies which are granted these 
exemptions; and 
 - Tax Committee and Customs Committee implement the exemptions and collect 
exempted amounts if these companies fail to  fulfil the requirement as described under 
point 6 below. 
5. Form of the subsidy (i.e., gr ant, loan, tax concession, etc.) 
 Exemption from: 
 - VAT on imports of goods for own use of the cotton processing company; 
 - Customs Duty on imports of goods for own use of the cotton processing company; 
 - Corporate Income tax; 
 - Minimal tax on income of enterprises; and  - Real estate tax and land tax. 
6. To whom and how the subsidy is provided  
Newly registered enterprise pla nning to engage in cotton processi ng submits formal request for 
these tax exemptions to the Government.  If a pproved the resolution of the Government is 
adopted through usual legislative procedure.  
According to Government Resolution No. 380 of  1 August 2008, the following seven enterprises 
have been granted these exemptions:   WT/ACC/TJK/25 
 Page 9 
 
 
  - "Cotton-Tekstile" CJSC9 - from 1 January 2007; 
 - "Spitamen-Tekstile" LLC - from 1 January 2007;  - "Khima-Tekstile" LL C - from 1 January 2008; 
 - "Olim-Tekstile" CJSC - from 1 January 2008; 
 - "Niku-Khujand" LLC - from 1 January 2008; 
 - "Nassochi-Khujand" - from 1 January 2008; and  - "ALM LLC" - from 1 January 2011. 
These exemptions are intended to stimulate increa singly higher levels (cycles) of processing of 
cotton, e.g. producing of yarn
 to fabric to garments.  Enterpri ses granted these exemptions are 
required to start new cycle of processing within 24 month from the date of starting the previous 
cycle.  Time frames for the start of the new cycl e have to be done according to feasibility studies 
based on international practice.  Exemptions will be terminated for enterprises failing to start the 
new cycle and such enterprises will have to comp ensate sum of all exemptions already granted. 
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy.  
There are no reliable statistics available for calculating the amounts of such subsidies 
provided.  
8. Products covered by the subsidy.   
 There is no specific list of products covered fo r the purposes of this exemption established in 
legal acts.  In practice, enterprises processing cotton to make yarn and producing cotton 
garments under following HS group headings are granted these exemptions by the decisions of 
the Government: 
 
HS Codes Description 
5204 Cotton sewing thread, whether or not put up for retail sale 
5205 Cotton yarn (other than sewing thread), containing 85% or more by weight of cotton, not 
put up for retail sale: 
5206 Cotton yarn (other than sewing thread), containing less than 85% by weight of cotton, not 
put up for retail sale: 
5207 Cotton yarn (other than sewing thread) put up for retail sale: 
5208 Woven fabrics of cotton, containing 85% or more by weight of cotton, weighing not more 
than 200 g/m2: 
5209 Woven fabrics of cotton, containing 85% or more by weight of cotton, more than 
200 g/m2: 
5210 Woven fabrics of cotton, containing less than 85% by weight of cotton, mixed mainly or 
solely with man-made fibres, weighing not more than 200g/m2 
5211 Woven fabrics of cotton, containing less than 85% by weight of cotton, mixed mainly or 
solely with man-made fibres, weighing more than 200 g/m2 
5212 Other woven fabrics of cotton: 
58011010 Woven pile fabrics and chenille fabrics, other than fabrics of heading 5802 or 5806: of 
cotton 
5802* Terry towelling and similar woven terry fabric s, other than narrow fabrics of heading 5806; 
tufted textile fabrics, other than products of heading 5703: of cotton 
580300100 -Of cotton 
580631 --Of cotton 
581091 --Of cotton 
600121 --Of cotton 
                                                      
9 "CJSC" - means Closed Joint-Stock Company. 
10 Only items made from cotton are covered for the purposes of this list.  WT/ACC/TJK/25 
Page 10 
 
 
 HS Codes Description 
600191 --Of cotton 
600320 --Of cotton 
6005* Warp knit fabrics (including those made on 
galloon knitting those of headings 6001 to 6004:  - of cotton 
600621 Of cotton:  
--Unbleached or bleached 
600622 Of cotton:  
--Dyed 
600623 Of cotton:  
--Of yarns of different colours 
600624 Of cotton 
--Printed 
610120 --Of cotton 
610220 --Of cotton 
610322 --Of cotton 
610422 --Of cotton 
610432 --Of cotton 
610442 --Of cotton 
610452 --Of cotton 
610462 --Of cotton 
610510 --Of cotton 
610610 --Of cotton 
610711 --Of cotton 
610721 --Of cotton 
610791 --Of cotton 
610821 --Of cotton 
610831 --Of cotton 
610891 --Of cotton 
610910 --Of cotton 
611020 --Of cotton 
611120 --Of cotton 
611211 --Of cotton 
611420 --Of cotton 
611595 --Of cotton 
611692 --Of cotton 
620112 --Of cotton 
620192 --Of cotton 
620212 --Of cotton 
620292 --Of cotton 
620319100 --Of cotton 
620322 --Of cotton 
620332 --Of cotton 
620342 --Of cotton 
620412 --Of cotton 
620422 --Of cotton 
620432 --Of cotton 
620442 --Of cotton 
620452 --Of cotton 
620462 --Of cotton 
620520 --Of cotton 
620630 --Of cotton 
620711 --Of cotton 
620721 --Of cotton 
620791 --Of cotton 
620821 --Of cotton  WT/ACC/TJK/25 
 Page 11 
 
 
 HS Codes Description 
620891 --Of cotton 
620920 --Of cotton 
621132 --Of cotton 
621142 --Of cotton 
621320 --Of cotton 
630130 -Blankets (other than electric travelling rugs), of cotton: 
630221 --Of cotton 
630231 --Of cotton 
630251 --Of cotton 
630291 --Of cotton 
630391 --Of cotton 
630419100 --Of cotton 
630520 --Of cotton 
630691 --Of cotton 
 
9. Duration of the subsidy and/or any other time  limits attached to it, including date of 
inception/commencement.  
Tax Code authorises Government to grant such be nefits up to 12 years staring from 1 January of 
the year of state registration of  newly established enterprise.  All seven enterprises currently 
have been granted benefits for 12-year period.  
10. Statistical data permitting an assessment  of the trade effects of the subsidy.   
 No statistical data is available. WT/ACC/TJK/25 
Page 12 
 
 
 IV. Incentives for Tajik Azot CJSC.  
1. Title of the subsidy programme, if relevant, or brief description or identification of the subsidy 
 Incentives granted to CJSC "Tajik Azot". 
2. Period covered by the notification 
 Period covered is 2011 calendar year. 3. Policy objective and/or purpose of the subsidy 
 Difficulties in transit of im ported mineral fertilisers through ne ighbouring countries  have led to 
high costs for farmers and shortages of  fertilisers in domestic market.  
4. Background and authority for the subsidy (incl uding identification of th e legislation under which 
it is granted) 
 (a) Subsidies are granted under: 
- Government Resolution No. 237 of 30 April 2011; and 
- Law No. 765 of 12 October 2011.  
 (b) Authority:  The Government of Tajikistan. 
5. Form of the subsidy (i.e., gr ant, loan, tax concession, etc.) 
Subsidy is granted in the following forms to Tajik Azot:  
(a) Reduced rate of VAT app lied on its imports and sales;  
(b) Preferential tariff rate of services of  natural gas supplies to Tajik Azot; and 
(c) Preferential rate of electricity supplied to Tajik Azot.  
6. To whom and how the subsidy is provided.  
 Tajik Azot - a producer of mine ral fertilisers is the recipient of the incentives as follows: 
 (a) VAT:  Imports for its own production purposes and supplies by Tajik Azot are subject 
to VAT preferential rate of 9 per cent, whereas, normal rate of 20 per cent applied generally. 
(b) Natural Gaz:  Tajik Azot has been grante d the following preferential tariff for services 
of TajikTransGaz for supplying of natural gaz per 1,000 cubic meters
11: 
                                                      
11 Average prices for 2011.  WT/ACC/TJK/25 
 Page 13 
 
 
  
TajAzot Other industrial and non-industrial 
consumers Margin of preference 
US$28.96 US$36.25 US$7.29 
 
Please note that cost of the supply services is sepa rate from cost of the imports of natural gaz.  
Preferences, therefore, does not apply to costs of imported gas, but only to services of TajikTransGaz, which is only a small fraction of the total price of the natural gas supplied. 
(c) Electricity:  Tajik Azot granted preferential rate of  electricity supply as follows:  
TajAzot Other industrial and non-industrial 
consumers12 Margin of preference 
US$0.024 (0.11 Somoni) US$0.046 (0.213 Somoni) US$0.022 (0.103 Somoni) 
  
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy.  
The approximate amount of subsidy for th e year 2011 is calculated as follows:   
 Amounts of Subsidy:  
(A) Data on total amount of VAT import exemptions received by Tajik Azot is not 
available; 
(B) Total amount of natural gaz consumed by Tajik Azot 3,781 thousand cubic meters 
multiplied by a margin of pr eference US$7.29 = US$27,563; and 
(C) Total of 25.3 Mln KWh electric energy was consumed by TajikAzot in 2011 * 
US$0.022 (the margin of preference) = US$556,600. 
Total subsidy: 
(B) US$27,563 + (C) US$556,600 = US$584,163. 
 Subsidy per unit:   Total amount of subsidy US$584,163 divided by total production of mineral fertilizers in 2011 
of 1,349 tons = Total subsidy per tonne was US$433.03. 
8. Products covered by the subsidy.  
 Mineral fertilizers – HS 3102.   
                                                      
12 Established by the Government Re solution No. 678 of 29 December 2009. WT/ACC/TJK/25 
Page 14 
 
 
 9. Duration of the subsidy and/or any other time  limits attached to it, including date of 
inception/commencement.  
 A. VAT - starting from 1 June 2011 – indefinite 
 B. Until 1 January 2013 
 C. Until 1 January 2013 
10. Statistical data permitting an assessment  of the trade effects of the subsidy.  
 Please note that currently Tajik Azot is idle  and is not manufacturing any fertilizers.   WT/ACC/TJK/25 
 Page 15 
 
 
 V. Incentives for Tajik Iron  
1. Title of the subsidy programme, if relevant, or brief description or identification of the subsidy 
 Incentives granted to CJSC "Taj Iron". 
2. Period covered by the notification 
 Period covered is 2011 calendar year. 3. Policy objective and/or purpose of the subsidy 
Support for agriculture through making more affordab le agriculture tractors and machinery.   
4. Background and authority for the subsidy (incl uding identification of th e legislation under which 
it is granted) 
 (a) Subsidies are granted under: 
- Law No. 639 On State Budget of the Republic of Tajikistan for 2011 of 
18 November 2010. 
 (b) Authority:  The Government of Tajikistan. 5. Form of the subsidy (i.e., gr ant, loan, tax concession, etc.) 
Subsidy is granted in the fo rm of VAT and customs duty ex emptions for imports and VAT 
exemptions for supplies by CJSC TojIron.  
6. To whom and how the subsidy is provided.  
Parts and equipment for assembling of tractors and other agriculture machinery imported by 
"Taj Iron" and supplies of tractors, combines and other agriculture machinery and equipment 
produced by "Taj Iron" are exempt from VAT and customs duty.   
7. Subsidy per unit, or in cases where this is not possible, the total amount or the annual amount 
budgeted for that subsidy.  
 The approximate amount of VAT exemptions received in 2011 is not available.    
 It is impossible to calculate subsidy per unit gi ven the different types of products that Taj Iron 
is able to manufacture and the fact the yearly output (total production) of all the products is 
less than five units.  The factory is practically non-operational. With such a negligible output 
and the lack of any reliable statistical data, the amount of subsidies received in 2011 expressed 
as a percentage of the total volume of production cannot be calculated.    WT/ACC/TJK/25 
Page 16 
 
 
 8. Products covered by the subsidy 
 Agriculture tractors and machinery produced by Taj Iron. 
9. Duration of the subsidy and/or any other time  limits attached to it, including date of 
inception/commencement 
 Subsidy is granted on an annual basis and continued for 2012. 
 
__________