MINUTES

of the Eighth Session of the Consultative Council on Improvement of Investment Climate under the President of the Republic of Tajikistan

November 8, 2011

The Council members and responsible officials in the attached list participated in the Session:

Agenda:

1. Decision implementing process of the Consultative Council on Improvement of Investment Climate under the President of the Republic of Tajikistan.

2. The results of the analysis of existence legislation of Tajikistan regarding the public-private partnership for the purpose of developing the draft of the Law of the Republic of Tajikistan “On Public-Private Partnership”.

3. Economic effectiveness increase measures of agricultural sector in achievement of food security in the Republic of Tajikistan.

4. Consideration of Draft Agenda of the 9-th Session of the Consultative Council.

Head of Council – the President of the Republic of Tajikistan Emomali Rahmon opened the 8-th Session of the Consultative Council in particular mentioned that in independent years of the country due to creative and constructive policy of the Government of the Republic of Tajikistan number of essential facilities including industrial enterprises, palace of sports, houses and other facilities of being on economic and social importance were constructed and put in exploitation by entrepreneurs of the country. Efficient activities of representatives of private sector of the country was acknowledged by the Government of the Republic of Tajikistan and number of entrepreneurs were rewarded with medals and letters of commendation on the occasion 20^th anniversary of independence of Tajikistan.

Accordingly the President of the country mentioned that to increase of role of private sector and development of entrepreneurship activities will be one of the primary processes on providing economic development of the country subject to new job vacancies, expansion of local production and growth of export potentiality. Full and timely implementation of Council decisions is one of the mainstream activities of the members of Consultative Council, government authorities, private sectors and partners for development.

Taking into account the mentioned points, regarding the first issue of the agenda the report of Mr. Saidov D.Sh.- Executive Secretary of the Council was listened, which he made in his speech detail information about the implementation of decisions of 6^th and 7^th Council’s sessions. In particular, it was mentioned that adopted Council decisions by the ministries and concerned agencies were implemented in general, but still issues are available, which could not find their decision.

In particular, paragraph 8 of the Action Plan of Decree of the Government of the Republic of Tajikistan dated May 28, 2010 N276 “On improvement of investment climate and indicators of the Republic of Tajikistan in the international ranking”, related to the development of the leasing market, which was considered by the 5^th Session of the Council, has not been yet fulfilled. Realization of the “State program for increasing export opportunities in the area of fruit and vegetable processing for 2011-2012 years” due to the partners for development who are the initiators of this program do not invest to the extent necessary, timely and effective implementation of the program is not possible in this direction and parties should take necessary and concrete measures.

Therefore, the President commissioned the Head of the Executive Office of the President of the Republic of Tajikistan and the Executive Secretary of the Council to take under strict control over the process of implementation of Council decisions and ongoing monitoring of the ministries and concerned agencies for the process of implementation of Council decisions. The monitoring results are submitted to the Prime Minister, and provided full and timely implementation of the Council decision.

Mr. Nicolas Guigas, the deputy Head of Representative Office of Swiss Agency for Development and Cooperation in Tajikistan, Mr. Joji Tokeshi, permanent representative of Asian Development Bank in Tajikistan, Mr. Faizali Rajabov, Head of Association of of builders of Tajikistan, Mr. Rustam Kosimov, Head of Internet Social Fund, Mr. Nekrui Zabirov, Head of entrepreneurs and exporters Union of Tajikistan, Mr.Daler Jumaev, Director General of OJSC “Pomir Energy”, Mr. Christopher Miller, Head of Representative office of International Financial Cooperation in Tajikistan, Mr. Kosim Kosimov, Minister of Agriculture of the Republic of Tajikistan, Mr. Ibodullo Nematov, Executive Director of Agrobusiness association of Tajikistan in Khatlon oblast, Mr. Stephan Erber, Head of Representative Office of German Agency for international cooperation in Tajikistan and Mr. Shiaoyu Zhao, Vice President of Asian Development Bank participated in the debate and consideration of the issues of agenda.

Mr. Shiaoyu Zhao in his speech mentioned that Foundation or Investment Center should be established at the expense of international organizations, state and private sectors for the development of state and private sector partnership and implementing projects must be invested by this authority. He also mentioned that agricultural farmers, suffering from shortage of agricultural production resources including fertilizers and manure, pesticides, quality seeds, farm machinery and their spare parts should be supported by international organizations.

Mr. Emomali Rakhmon, the President of the Republic of Tajikistan, Head of Consultative Council sustaining the proposals of Mr.Shiaoyu Zhao said that Asian Development Bank and other development partners should support the Republic of Tajikistan in case of returning near 70ha of land into agricultural rotation which are under poor irrigation condition. Returning these lands into agricultural rotation will assist in real economic development, providing food security and establishing more than 100thousand job vacancies.

President supporting the proposal of development partners connected with reducing number of taxes and its administration and other aspects of economic reform said that in case of implementing these ideas there should be compensation source of revenue contraction in the state budget by international organizations and development partners of Tajikistan. In this regard, fruitful action of the Asian Development Bank towards implementing projects in Tajikistan was assessed satisfactory and on this ground it is served the purpose to turn the activity of development partners of Tajikistan in implementing economic reform towards improving investment climate and business into new qualitative level.

With the view of enhancement of efficiency of agriculture sector on the way of achievement of food security in the republic it is mentioned that today farmers of the country among progresses are encountering troubles including shortage of pesticides, quality seeds, farm modern machinery and its spare parts which are becoming obstacles in the development of the sector.

Head of the Council supported the said issue and mentioned that import of agricultural production facility including some of category of fertilizers and manure, pesticides, seeds, import and delivery of machinery and technology of production sector are exempted from value added tax and custom duty.

According to the last issue of the agenda of the session, Mr. Davlatali Saidov, Executive Secretary of the Council had a speech and informed about project development “Perfect order of inspection of entrepreneurial subjects” which will be one of the issues of the draft agenda of the 9^th session of Consultative Council.

In Particular, it is mentioned that commissioning the function of state competent authority for conforming the examination of entrepreneurial subjects activity, monitoring and analysis of examination of entrepreneurial subjects, establish of examination list and fixing risk level system will give an opportunity to reduce overload state budget, to use budget funds purposeful or to head the action of examination authority for holding preventive measures. In this regard, project development “Perfect order of inspection of entrepreneurial subjects” is considered purposeful.

Therefore, the President commissioned to develop the project “Perfect order of inspection of entrepreneurial subjects” and draft laws connected with the partnership of the government and private sector and to use the depth of ground sector and to submit for discussing in regular meetings of the Council with participation of representation of state authority, private sector, Consultative Council and by support of development partners.

Mr. Emomali Rakhmon, the President of the Republic of Tajikistan, Head of Consultative Council in conclusion of his speech explained his opinion regarding issues discussed in the session, in particular attracted the attention of audience to one of the important factors of enhancing investment climate and business and attraction of more foreign and local investors to the economy i.e. to establish extensively leasing cooperation. Head of the Government mentioned that local manufacturers should sustain their position in local and world market. Therefore, they should apply in production the modern equipment and high technology.

But most of local manufacturers have no this possibility, because modern equipment has a very high price. One of the solving problems in the development of the market is leasing, that such kind of banking service according to the world best practice creates favorable conditions for entrepreneurships in growth of production.

Therefore, for the purpose of growing local production and its exporting, establishing new jobsites, processing local raw material, increasing internal sources of taxation and depositing more funds to the budget, exempting import and delivery of equipment and manufacturing technology from value added tax and tax duty through leasing operation to be considered advisable.

Along with this, the President said that current policy should not be more than aimed at execution of plan for tax collection only at the expense of import tax levy and tax duty. Because, it will create serious obstacles in importing more techniques and high technology and growth of local production. According to the President concerned government authority should bend every effort to improve investment climate and business, to grow a real sector of economy and for reasons given to increase internal tax sources.

According to mentioned points, the President of the Republic of Tajikistan, Head of Consultative Council gave to concerned authority and responsible persons the following instructions and commissions:

1. The Government of Republic of Tajikistan control the implementation of decisions and recommendations of the Consultative Council and conduct regular inter-session meetings chaired by the Prime Minister with the view to ensure timely implementation of the decisions and recommendations of the Consultative Council.

2. Concerned ministries and agencies should provide full, timely and quality implementation of Council decisions.

3. Concerned departments of the Executive Office of the President of the Republic of Tajikistan should submit draft laws of the Ministry of Finance of the Republic of Tajikistan regarding provided taxation of leasing operation for discussion in the next session of the Government of the republic.

4. State Committee for investment and state property management of the republic of Tajikistan jointly with the Secretariat of the Consultative Council, representations of the government authority, private sector and with attraction of partners for development:

- to develop draft laws of the Republic of Tajikistan “On Public-Private Partnership”, “On using the depth of the ground”, draft resolution of the Government of the Republic of Tajikistan “On approval of perfect order of inspection of entrepreneurial subjects” and to submit to regular session of the Consultative Council;

- to provide overall analysis about situation of real investment climate and business in the Republic of Tajikistan and to submit the results for discussion in session of Consultative Council.

5. Head of government commission on developing new Tax Code should submit detail information about developing the draft Tax Code in the next session of Consultative Council.

6. Chairman of GBAO, chairman of Sughd, Khatlon oblasts and Dushanbe city should provide deep analysis on enhancing investment climate and business and take strong measures for facilitation of entrepreneurs challenges and improving the role of private sector and submit detail report in regular session of Consultative Council.

7. Ministry of Agriculture of the Republic of Tajikistan:

- immediately to study the issue of exempting from value added tax and tax duty the import of some fertilizers and manures, pesticides and quality seeds and to submit legal texts according to established order for consideration of the Government of the Republic of Tajikistan;

- jointly with the Ministry of water resources and land reclamation, Academy of agricultural science and sector research institute, executive body of local government authority and investors, to take specific measures for putting up high agricultural technology including saving technology for water supplying, quality seeds, good land care and its meliorative situation and on this ground to increase agricultural sector and to submit the Government of the Republic of Tajikistan the information about its results.

8. Ministries of water resources and land reclamation, agriculture, economic development and trade should hold specific activities on preventing desertion of arable lands and to take sound measures for providing quality construction works and rehabilitation of irrigation facilities and to submit the Government of the Republic of Tajikistan the information about its results.

9. Ministry of Finance, National Bank and other concerned agencies to provide the Government of the Republic of Tajikistan specific proposals for resolving problems on getting long term loans for developing agricultural sector.

10. The main heads of the ministries and agencies of economic sector of the republic should participate in regular sessions of Consultative Council.

Davlatali Saidov

Executive Secretary of the Consultative Council,

Chairman of the State Committee for Investment and

State Property Management of the Republic of Tajikistan