Drivers are concerned about the levy on car recycling in Tajikistan. Experts believe that the main purpose of the fee is to replenish the budget.
In late December 2023, Tajikistan’s parliament passed amendments to the law “On Other Compulsory Payments to the Budget” that oblige owners of all types of vehicles to pay a one-time fee to the state for the destruction (“utilization”) of these vehicles.
“The draft law is designed to ensure environmental safety, protect the health of citizens and the environment from the impact of waste, as well as to find additional sources of replenishment of the state budget,” Finance Minister Faiziddin Kahkhorzoda said during the presentation of the bill.
He said the decision was made based on the analysis of the legislation of neighboring countries such as Uzbekistan, Kyrgyzstan, Kazakhstan, Belarus, and Russia.
The fee will be charged once per vehicle, Kakhkhorzoda said. The owner will be issued a supporting document valid until the vehicle is destroyed.
“This measure lays the foundation for additional funds to the state budget and contributes to the implementation of appropriate measures to ensure a favorable environmental situation in the country,” Kahkhorzoda said.
Member of Parliament Giyosiddin Ashurzoda said the draft amendments were proposed by the president of Tajikistan.
“The purpose of amending this law is to establish a fee for the utilization of motor vehicles and to find additional sources of revenue for the state budget,” Ashurzoda said.
The State Automobile Inspection Department (SAI) of the Ministry of Internal Affairs is responsible for the collection of the fee.
How is the process of vehicle destruction carried out in neighboring countries?
In Kazakhstan, the car recycling program started in 2016. The fee for the destruction or utilization of vehicles depends on the type and category of vehicles. Car owners have to pay taxes from 229 thousand tenge to 3,139,000 tenge (500 to 6.9 thousand USD) depending on the category of the car.
In addition, car owners who turn in their vehicles for recycling will be given monetary compensation or a discount from 48,000 to 150,000 Tenge ($105 to $328) to purchase a new car.
In Uzbekistan, a fee for the disposal of old cars was introduced on August 1, 2020. The amount of payment depends on the category, year of manufacture, engine volume of the car and ranges from 670 to 31 thousand dollars.
Drivers are concerned about the size of the tax
Saimiddin Hasanzoda, head of the agitation and propaganda department of the UGAI, specified the amount of payment for vehicle disposal.
Thus, motorcycles will pay 360 somoni (about US $33); cars and other vehicles that carry more than 10 people, 1,584 somoni (about US $145); and trucks and special equipment, 2,880 somoni (about US $264).
According to the Ministry of Transport, more than 577,000 vehicles were registered in Tajikistan in April 2023, including:
– 50,248 trucks,
– 15,587 passenger cars,
– 507,661 personal vehicles,
– 1,780 units of special vehicles,
– 2,036 motorcycles.
According to CABAR.asia’s calculations, about one billion somoni (91 million dollars) should go to the country’s budget if tolls are collected from this number of vehicles. With state budget revenues planned at TJS 43 billion (about $3.9 billion) in 2024, this amount would represent about 2.3% of all revenues.
The average salary last year in Tajikistan was about US $170 .
Technical inspections are mandatory once a year, costing owners of passenger cars 250 TJS (about US $23) and owners of other types of vehicles 350 TJS (about US $32).
Dushanbe resident Sirodjiddin Sharifov is concerned about the new levy on cars. He also said the transportation tax has increased since January 1 of this year.
“We have two cars at home. Now we have to pay almost 3,200 somoni (about US $290) for two cars just for the tax. It’s very hard,” he told CABAR.asia.
The introduction of the new fee comes amid rising taxes and electricity bills since the beginning of the year, he said.
“Every year we go for technical inspection, and we spend money on that too. The question arises, where will this money go for utilization?” – Sharifov wondered.
Rustam Jalil, a driver from Dushanbe, knows nothing about this parliamentary decision.
“I have owned several cars, but I have never turned them in for recycling. So I don’t know whether such a fee has been charged before or not,” Rustam Jalil said.
He believes that if it will work in reality, “it is a good thing”.
“In practice, cars damaged in an accident are sold for parts and only the body remains, which is to be recycled. If all this material is recycled, I’m willing to pay. Because it is important for the future of our children,” Rustam Jalil said.
However, he added that for many people this amount of payment would be unaffordable.
“I have a high salary compared to others, but even for me this amount is big. All payments are made through banks, it should be possible to pay this amount in installments,” Rustam Jalil suggested.
New tax for car owners in Tajikistan
According to economic observer Nur Safarov, the first thing that needed to be worked out was the recycling procedure itself.
“This practice exists in developed countries, but the payment for disposal is made after the car has gone to a landfill and will be disposed of in accordance with technological conditions,” the expert said.
According to him, the issue of recycling old cars or cars that have been in accidents is now solved by selling or handing over the old car or its remains to the so-called “car dump” in Dushanbe, where there are several collection points. The owners of these points then dismantle the cars and sell spare parts from these cars.
“As far as I know, this is a private business. Whether the state will create its own scrap metal collection centers and how this will happen is still an open question,” Safarov said.
He does not believe that the introduction of this fee can significantly affect the price of cars.
“I think that in the medium term, the price of cars with internal combustion engines may be affected by the mass importation of electric cars. There will also be no increase in the prices of services and goods. To a greater extent, the market is influenced by changes in fuel prices and fluctuations in the somoni exchange rate,” the expert suggested.
Nur Safarov agrees with the opinion that the authorities are simply trying to replenish the budget in this way.
“In my opinion, the priority of replenishing the budget comes first. Appetite comes at mealtime. Given our realities, there is no point in expecting any positive economic consequences. Motorists will have to tighten their belts,” Nur Safarov said.
According to lawyer Shokirjon Khakimov, the decision to introduce a disposal fee contradicts the law.
“Because in essence it means the introduction of a tax. Those who have the right to appeal to the Constitutional Court should apply for a substantive assessment of rights and correction of objections. Otherwise, there will be anxiety among certain segments of society,” Khakimov said.
Anisa Abibulloyeva, an employee of the environmental organization Little Earth, said that a tax on car recycling is a very common practice that is implemented in most countries around the world.
“However, in Tajikistan’s conditions, unofficial ways of processing cars, which are widely used in the country, should be taken into account,” the expert said.
In her opinion, the country does not have a ready infrastructure for full-fledged car recycling.
“We hope that the amount of this payment will indeed be used to create a system of car recycling for the benefit of the environment,” says Anisa Abibulloeva.