VZCZCXRO7437
PP RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #0966/01 2100814
ZNR UUUUU ZZH
P 280814Z JUL 08
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC PRIORITY 1240
INFO RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHAK/AMEMBASSY ANKARA 4083
RUEHBJ/AMEMBASSY BEIJING 1899
RUEHKO/AMEMBASSY TOKYO 1764
RUEHIT/AMCONSUL ISTANBUL 2333
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHINGTON DC
RUEHVEN/USMISSION USOSCE 2732

UNCLAS SECTION 01 OF 02 ASHGABAT 000966 
 
SENSITIVE 
SIPDIS 
 
STATE FOR SCA/CEN, EEB 
 
E.O. 12958: N/A 
TAGS: PREL EAID ECON EFIN TX
SUBJECT: TURKMENISTAN:  DEPARTMENT OF TREASURY SEES 
POTENTIAL FOR ASSISTANCE IN E-FILING 
 
REF: A. ASHGABAT 959 
     ¶B. 07 ASHGABAT 1039 
 
¶1.  (SBU) SUMMARY:  Visiting tax specialists from the U.S. 
Department of the Treasury's Office of Technical Assistance 
were impressed with the organized operations of the Main 
State Tax Service and do not believe that the Service needs 
Treasury assistance at this time.  To keep a foot in the 
door, however, the team will propose a project to help 
develop e-filing in Turkmenistan.  The Main State Tax Service 
plans to electronically connect all district offices with its 
headquarters in Ashgabat by the end of 2008 or the beginning 
of 2009, and aims to offer e-filing services in 2010.  Post 
supports this project as a way of keeping the dialogue open 
and because it would develop programs that will help improve 
Turkmenistan's still-poor commercial investment climate.  END 
SUMMARY. 
 
WELL-ORGANIZED AND OPEN MEETINGS 
 
¶2.  (SBU) U.S. Department of the Treasury officials Alan 
Robidoux, Regional Tax Administration Advisor, and William 
Remington, Associate Director for Tax Policy and Tax 
Administration, met with both Turkmen officials and private 
sector actors during their assessment visit July 21-25.  The 
government granted all requested meetings, including at the 
Main State Tax Service, State Institute for Strategic 
Planning, Ministry of Finance, Chamber of Commerce, and the 
Union of Entrepreneurs and Industrialists (Ref. A).  In 
addition, the Main State Tax Service arranged 1 1/2 days of 
individual working-level meetings with the heads of the Tax 
Checks (for legal entities), Tax Checks (for individuals), 
Personnel, Tax System Development, Tax Debts, Consulting, and 
Information Technology departments; with the deputy head of 
the city of Ashgabat's tax office; and with the head of 
Ashgabat's Kopetdag district tax office.  The team met with 
Chairman Nurmuhammet Ashirov and Deputy Chairman Pavel 
Pryanichnikov at the beginning and at the end of the visit. 
Pryanichnikov put an English-speaking young professional, 
International Taxation Section First-Level Expert Tayhar 
Tayharov, in charge of the delegation. 
 
DELEGATION RATES TAX ADMINISTRATION AS "VERY GOOD" 
 
¶3.  (SBU) Robidoux and Remington were impressed with the open 
nature of the well-organized meetings at the Main State Tax 
Service.  They rated all aspects of tax administration as 
presented at the State Tax Service as "very good," noting 
that the very controlled financial system does not allow for 
too many irregularities.  Given the small size of 
Turkmenistan's private sector and the government's 
still-limited dependence on tax revenue, they concluded that 
Treasury assistance at this point is largely unnecessary. 
However, the service may need assistance in a few years if 
the private sector grows.  Although Remington and Robidoux's 
first reaction was to offer no assistance because the 
organization was so well-run, the team realized that it could 
propose an e-filing project in order to help the State Tax 
Service reach one of its goals and to continue the dialogue. 
The Main State Tax Service is planning to electronically 
connect all of its regional offices by the end of 2008 or the 
beginning of 2009, and envisions offering e-filing services 
in 2010.  Remington believes that the project could consist 
of three or four trips of a week or two each to help set up a 
project plan and monitor progress towards implementation. 
The team might offer study tours to the U.S. or other 
countries to learn other viewpoints about the administration 
of tax systems, but this project would not include assistance 
with programming or offers of software. 
 
SOME RECOMMENDATIONS TO THE MAIN STATE TAX SERVICE 
 
 
ASHGABAT 00000966  002 OF 002 
 
 
¶4.  (SBU) Remington and Robidoux noted that the Main State 
Tax Service should consider planning to make adjustments in 
the future as the private sector expands and as its work 
becomes more complex, and recommended consulting with the 
Union of Entrepreneurs and Industrialists about concerns of 
the private sector.  Treasury's Tax team also said that the 
Service's management should brainstorm on goals, looking 
three to five years in the future to create a strategic plan. 
 
INSTITUTE FOR STRATEGIC PLANNING NEEDS IMF'S ASSISTANCE 
 
¶5.  (SBU) The Institute for Strategic Planning, which was 
established in 2007 and employs 80 specialists, is working on 
the country's "Strategic Program through 2030."  At a meeting 
on July 21, the deputy head of the Institute asked for 
assistance with charting tax policy which would support the 
Strategic Program through 2030.  This includes methodology 
(training for specialists on scientific tools and mechanisms 
used in tax policy) and developing a tax policy that 
encourages growth of small and medium enterprises over the 
short-, medium-, and long-term.  However, the Treasury 
Department's Office of Technical Assistance does not work in 
this area and will recommend that the Vicki Perry of the 
International Monetary Fund's Financial Affairs Department, 
Tax Policy and Tax Administration Unit make an assessment 
trip.  A meeting at the Ministry of Finance with Deputy 
Minister Dovletgeldi Sadykov and various department heads 
focused also on discussion of the Strategic Program through 
¶2030. 
 
¶6.  (SBU) COMMENT:  Business contacts of the Embassy have 
suggested that the Treasury team may have met only with the 
sharpest tax officials.  There remain a number of less 
efficient tax officials, particularly at the local level, and 
the tax service may need assistance down the road if the 
demands on it increase.  The proposal to work on e-filing may 
be a good way of keeping the door open until we see the 
results of President Berdimuhamedov's current initiative to 
promote private sector growth.  END COMMENT. 
CURRAN