DUSHANBE, April 1, 2011, Asia-Plus -- Russian cellular operators will be forced to considerably reduce international transit traffic in Tajikistan if local regulator does not review its position regarding collection of taxes from mobile phone companies, Russia’s news agency, RBK daily cited one of market participants as saying.

“In this case, profitability of business in Tajikistan will substantially decreased and it is not clear in such a situation to what an extent it will be expedient to work in such a region,” he was quoted as saying.

According to him, Tajik authorities have collected a 12 percent VAT on foreign traffic over the past three years.  “In the meantime, under the International Telecommunication Union''s 1998 Melbourne Treaty (ITU Treaty) foreign traffic is exempted from paying VAT but local authorities do not recognize this,” said RBK’s interlocutor, “Moreover, amendments made to the Tajik tax code in January obligate to pay VAT for local partner operators as well.”

In addition to this, an excise tax was imposed on cellular communications services this year.  This leads to decline in transit traffic volumes and business of operators in Tajikistan is becoming unprofitable, he added.

We will recall that the law requiring amendments to the country’s Tax Code that went into effect on January 6 this year provides for putting the cellular communications services on the list of commodities subject to excise tax.  The law also provides for the excise tax at the rate of 3 percent of the cost of the cellular communications services.  Following imposition of the excise tax on cellular communications services, mobile phone operators in Tajikistan raised fees for their services by 3 percent starting on February 1.

Two Russian mobile phone companies operate in Tajikistan – VympelCom and MegaFon.