Internet in Tajikistan Will Become More Expensive

The rise of Internet price in Tajikistan will not lead to an increase in state treasury tax collection, but can lead to a complete degradation of the mobile Internet market in the country, experts say.

Follow us on LinkedIn

According to the order of the Antimonopoly service of Tajikistan, since March 27, 2019, the cost of the Internet in the country will rise exactly twice. All mobile and cellular operators will be required to set the price for 1 gigabyte of Internet at 63 somoni ($6.68), including VAT cost. Currently, one gigabyte is sold in Tajikistan at 30-35 somoni ($3.7).

*Nusratullo Davlatzoda. Photo: Asia-Plus*

This intention of the Tajik authorities was announced on February 14 during a press conference by the Tax Committee of Tajikistan, when the Chairman of the Tax Committee Nusratullo Davlatzoda said that the problem of increasing collected taxes will be solved by introducing taxes on citizens’ chats in messengers, including such as Imo, WhatsApp, Viber and others:

Our goal is to solve the problem of reducing tax revenues.

According to Tajikistan’s chief tax officer, the experience of levying taxes on messengers already exists, allegedly, in countries such as France, Russia, Belarus and even in Greece and Spain.

#iamagainst

Users of social networks started collecting signatures under a petition addressed to the country’s president Emomali Rahmon. However, the extent to which this initiative will be able to suspend this decision remains not known.

Simultaneously, a flashmob “I am against the increase of Internet prices” trends up in Tajikistan’s social networks.

The use of messengers in Tajikistan has grown rapidly in recent years. They started being especially loved by Tajik users after the tariffs for international telephone calls were increased to 1.2 somoni ($0.13) per minute. Messengers are much cheaper, and this is an important aspect for those whose relatives work abroad as labor migrants.

The decline in the volume of telephone calls due to the spread of voice messengers reduced the tax payments of mobile companies to the state treasury. According to official data, only in 2018, these companies paid in taxes 120 mln somoni (12.725 mln dollars) less than in the previous year.

Meanwhile, the experts in the communications sector believe that the increase in Internet prices will not solve the problem of tax collection increase, but, on the contrary, will jeopardize many industries and can throw the development of the country far back.

“Such a sharp rise in the price of the Internet will lead to a reduction in the number of users and, thus, to a reduction in the income of mobile companies, which, in turn, will lead to an even greater reduction in collected taxes,” — said Gafurjon Erkaev, Chairman of the Association of Mobile Operators of Tajikistan.

Tax officers see mobile companies as “cash cows”.

Media specialist, blogger and economist Rustam Gulov says that “tax officers see mobile companies as “cash cows”, but all these initiatives, first of all, deal a heavy blow to the pockets of ordinary consumers”.

Unconventional Solutions

According to the Speedtest Global Index, Tajikistan is in third place from the end of the list when compared to others by its mobile Internet speed, and surpasses only Venezuela and Algeria.

Meanwhile, the high incomes of mobile companies and Internet providers have long haunted both the tax authorities and the heads of Communication Service, who periodically initiate applying unconventional solutions that spark bitter backlash from the ordinary citizens and disapproval of the government.

In the summer of 2018, the Communication Service initiated the re-registration of SIM-cards and an increase in prices up to 250 somoni (about $27) for each SIM-card. This caused huge queues at the re-registration centers and discontent of the population. Afterwards, the president of the country Emomali Rahmon suspended this initiative.

In January 2018, the state operator “Tojiktelecom” announced it will monopolize the sales of web traffic to all Tajik ISPs and mobile companies, prohibiting them to buy Internet in neighboring countries.

Previously, ISPs and mobile companies in Tajikistan could choose from where to buy Internet – from Kyrgyzstan, Uzbekistan or China. Mobile companies and ISPs now continue to buy Internet from the national operator for $51.000 for one gigabit channel. All cellular communication in Tajikistan passes through a single data switching center of electric communication.

In the autumn of 2017, the head of the Communication Service Beg Sabur demanded that all mobile operators turn off communication services for NGN phones, as well as for popular messengers of Viber, WhatsApp, IMO and Telegram. This was motivated by reasons of “national security”, but this initiative was later also rejected by the government.

Over the past four years, the Tax Committee has repeatedly fined mobile companies a substantial sum of money, putting forward various, incomprehensible to many, reasons. For example, “Beeline” was fined 151.3 mln somoni (more than $16 mln), “MegaFon” and “TCELL” – 155 mln somoni ($16.4 mln).

Moreover, the mobile companies were mandated to pay to the budget 80 diram (8 cents) per month for each SIM-card.

Market Monopolization

According to experts, all these initiatives reveal the goal-oriented process of communication market monopolization. This is evidenced also by the fact that the decree of the Antimonopoly Committee on increasing the Internet price is not applicable to the state operator “Tojiktelecom”.

According to the state Communication Service, in 2018, the total revenues of the mobile companies amounted to about 2.6 bln somoni ($275 mln), while the share of “Tojiktelecom” equaled to only 7.6% of these revenues ($21 mln).

Meanwhile, Gulov notes that the desire to monopolize the communications market in a single pair of hands will harm the economic development of the country.

History demonstrates that monopolization leads to dire consequences. Soviet Union can serve an example, as it existed on the verge of economic collapse. And if it had not collapsed for political reasons, it would have collapsed for economic reasons. By centralizing the communications market in a single pair of hands, the state also seeks to unilaterally control the political field in the country. It will become easier just to flick the switch and disconnect everyone from the Internet.

This article was prepared as part of the Giving Voice, Driving Change – from the Borderland to the Steppes Project implemented with the financial support of the Foreign Ministry of Norway. The opinions expressed in the article do not reflect the position of the editorial or donor.

If you have found a spelling error, please, notify us by selecting that text and pressing Ctrl+Enter.