According to the IWPR (Institute for War and Peace Reporting) the Tajik government has established a deadline (April 1, 2006) for all civil servants to declare their income to the tax authorities of the country.

Civil servants have until April 1 to hand in their income declaration forms – which must record their salary, money or gifts received from any other sources and the tax paid so far on the aforementioned – but the fact that the information must remain confidential, unless the official agrees to it being made public, has aroused suspicions.

If tax inspectors believe that an official is not being transparent, they have the right to investigate further. Many here question whether civil servants will be honest about their earnings and assets and believe it’s unlikely that dubious declarations will be seriously challenged.

Reflecting the public mood, Mirzob Bodurov, a university student, said, “Look at the houses that officials live in. But just try to prove anything. People are scared. Will a tax inspector risk the life of his family to expose an official? Never. He will take a bribe of 200 US dollars and calm down.”

The widespread doubt about the effectiveness of the measure has some serious grounds. It is impossible to fight corruption in a country where income disparity among people is so high. The matter gets worse if one factors in the absense of a well-developed banking industry in Tajikistan. Banks in Tajikistan are poorly integrated into country’s economic life. Most banks are still based on outdated Soviet banking concepts, which limits the role of such institutions. So long as most transactions in the country are cash based it will be hard to fight corruption based on hard evidence.

Analysts say corruption amongst bureaucrats will continue flourish for as long as they receive low salaries and high tax demands.

A high-ranking civil servant admitted as much in an interview with IWPR. “If I honestly indicate everything earned by myself and my family, then about half will go to taxes,” he said. “I would like to pay taxes properly [but] the taxation system must be reviewed. Otherwise everything will be hidden.”

Corruption is not confined to the civil service - all echelons of society are afflicted. Indeed, Transparency International has ranked the country amongst the ten most corrupt in the world.

The reason for corruption in Tajikistan is mainly low wages. The problem is that the government does not have enough funds to pay high salaries for officials and public servants. That is primarily caused by the fact that it (Tajik government that is) cannot effectively tap into the real cash flows in the economy due to nonexistent banking sector. This in turn pushes it to raise the taxes so it could afford a minimum wage for its employees. High tax rates create a pressure in the society to find more ways to avoid them (through bribes, etc.) Instead of raising taxes the Tajik government needs to expand its tax base. There are two steps that need to be taken in this respect. The first step is to introduce a flat tax rate (similar to that in Russia), while introducing harsh penalties for those who avoid it (so that taxes and death do indeed become certain). That will take care of many people who now hide their income. When the cost of hiding taxes outweighs benefits, many will report.

The second step is to introduce the legal and economic base that would make the collection of taxes (up to this day it’s only source of revenue) easier. I am sure that the real size of the Tajik economy (income from drug traffic not taken into account) is greater than what the official statistics show. Therefore it is safe to assume that officials and public servants could be indeed paid a higher salary. The Tajik government needs to create a platform (reasonable tax legislation and an effective banking system) that will allow it to collect taxes effectively. This should take years to materialize, but it is achievable. One way of doing it is through additional funding (from international organizations) that would allow the government to raise the salaries of public servants (hence diminishing the incentive for corruption) while establishing the platform (juridical and economical) to enhance state’s revenues. This however needs a genuine political will of the government to materialize. At the end of the day it will benefit everyone in the society and make it more economically coherent.

The head of the prosecutor general’s office, Abdurasul Kholmurodov, says that significant strides have been made in prosecuting venal citizens, but he has not been given enough funds to launch a real offensive against corruption.

“Our department is new, and we do not have enough resources. Nevertheless, we have had some major successes. According to statistics, last year 125 corruption-related crimes were detected: 28 cases of bribery, 22 of abuse of power, 43 of property theft and 20 of smuggling,” he said.

The highest number of crimes were reported in the education and health sectors. Some of the most shocking cases involved headmasters who extorted money from their pupils and used it to provide bonuses for teachers, keeping the rest for themselves.

I hope the efforts of the Tajik government are genuine and not just another PR campaign. The country needs funds to raise salaries and be able to sustain it for at least 5 years. Until that has materialized the fight against corruption will be limited to low-key figures such as school principals.