Reforms in the sphere of business regulation

Reform of licensing system


Draft Decree of the× President of the Republic of Tajikistan “On Reforming of the Licensing System” was prepared by the× Committee on Investments and×Management of the Republic of× Tajikistan according to the results of the research of the International Finance Corporation, “Business Environment in Tajikistan.”
 
This Presidential Decree is aimed at creation of a more enabling environment for doing business and improvement of the investment climate.
 
The main reason for the implementation of this reform was low international ranking of the republic on the investment climate, which was formed as a result of the excessive state regulation of business.
 
Complex and non-transparent administrative procedures which entrepreneurs have to follow in course of the establishment and doing business are too burdensome. The high costs of business arise from:

  • the absence of the clear legislative framework that regulates licensing system,
  • the contradictions in the normative and legal acts and inadequate execution of laws,
  • the lack of separation of powers between licensing authorities,
  • the lack of transparency and limited access of entrepreneurs to the regulatory framework.

 
The existed administrative procedures entailed corruption in the licensing authorities for carrying out of business. According to the calculations of the×Corporation, the total revenue of the state budget from all permits issued was 1.8 million US dollars a year, while the costs for maintaining of the licensing system made up 2.3 million US dollars.
The introduced reforming mechanism of the licensing system stipulates fast revision of normative and legal acts which regulate issuance of permits to carry out business activities for its compliance with the criteria of legality and necessity of procedures for business development. This mechanism will allow: 
First, to eliminate permits which are outdated and do not meet the requirements of market economy, to simplify administrative procedures and shorten the time required to obtain permits. It is assumed that the reduction of administrative procedures for obtaining permits by 40% will reduce the costs of small and medium businesses up to 450.000 US dollars. 
Secondly, the official tariffication of permits will ensure the transparency of the process and will allow saving of nearly 1.13 million US dollars for entrepreneurs. 

Successful completion of the reforming of the licensing system will allow× Tajikistan to create a new licensing system which will be transparent and enabling free competition. This system will also promote entrepreneurship, thus stimulating the attraction of local and foreign investment, and ensuring economic growth and social development.


Chronology/Timing of interventions:

1. In accordance with the× Resolution of the Government of the× Republic of Tajikistan “On measures to implement Presidential Decree “On reforming of the licensing system in the× Republic of Tajikistan” dated May 28, 2009, 305, the× Commission was established to improve the normative and legal acts regulating issuance of permits to business entities.

2.Based on the order of the× Commission to ministries and agencies and local executive bodies, it was ordered to provide sectoral licensing documents by December 2009. As a result, 200 justified licensing documents were provided.

3.The second stage of the revision of licensing documents by the private sector was under execution since December 2009 up to the end of January 2010.

4.At present,× Commission has fully reviewed all the documents submitted by ministries and agencies and evaluated current permits. Protocol Decisions of the× Commission were presented to the× Government for consideration.

5.Besides, the established× Group is working on the development of the draft law “On licensing system" of the× Republic of Tajikistan.
 

Reforms in construction field