Turkmenistan, an energy-rich country in Central Asia, has a tariff system that is structured to regulate imports, protect local industries, and encourage economic diversification. As one of the most closed economies in the region, Turkmenistan’s customs policies are primarily aimed at promoting self-sufficiency, fostering industrial development, and generating revenue for the government. The country’s customs tariff rates are based on a variety of factors including the nature of the product, its source, and the country’s economic and strategic priorities.
Turkmenistan’s import tariff system is managed by the State Customs Service, which oversees the regulation of imports and exports. The rates applied to different product categories reflect the government’s aim to limit imports of certain goods while promoting the growth of key domestic industries such as energy, agriculture, and manufacturing.
Introduction to Turkmenistan’s Import Tariff System
Turkmenistan’s customs tariff system is relatively simple compared to more open economies, and is governed by the Customs Code of Turkmenistan. The tariffs are applied to imported goods based on their classification under the Harmonized System (HS), which is a globally recognized method for categorizing products.
In addition to customs duties, imports are subject to Value Added Tax (VAT), which is typically set at 15% for most goods. Some essential goods, particularly foodstuffs and medicine, may be subject to reduced VAT rates or exemptions. The customs duties imposed on products vary widely depending on the product category, ranging from zero percent for essential raw materials to high tariffs on luxury goods and certain consumer products.
Turkmenistan is a member of several international organizations, such as the World Trade Organization’s (WTO) Generalized System of Preferences (GSP) and the Eurasian Economic Union (EAEU), which influence its tariff structure. The country has limited direct free trade agreements but has some preferential trade arrangements with other Central Asian nations, Russia, and countries of the European Union.
Key Features of Turkmenistan’s Customs Tariff System:
- Preferential Tariffs: Turkmenistan maintains preferential tariff rates with some countries, primarily within the framework of regional agreements like the EAEU, which provides reduced tariffs for member states.
- High Tariffs on Luxury Goods: Import duties are relatively high for non-essential goods, particularly luxury items, as part of the government’s strategy to limit consumption of foreign-made high-end products and protect domestic markets.
- Zero Tariffs on Raw Materials: To foster domestic manufacturing, Turkmenistan exempts or reduces tariffs on raw materials, intermediate goods, and machinery that are used for industrial production.
- Environmental and Health Considerations: Products that meet environmental standards or are related to public health may qualify for tariff reductions.
General Overview of Tariff Rates by Product Category
The following sections provide an overview of the tariff rates imposed on various categories of imported goods in Turkmenistan.
1. Agricultural Products
Agricultural imports are subject to tariffs in Turkmenistan to protect local agriculture and support food security. The country is both a producer and importer of various agricultural products, and tariffs vary depending on the nature of the product.
Tariffs on Agricultural Products:
- Cereal Grains:
- Wheat: The tariff rate for imported wheat is typically around 15%. This reflects the need to maintain the local production of wheat, although wheat is also an important import for the country.
- Rice: Rice imports are taxed at 25% to protect the local agriculture sector from external competition.
- Fruits and Vegetables:
- Tomatoes and Potatoes: Fresh vegetables, such as tomatoes and potatoes, face tariffs between 10% to 20% depending on market conditions and production cycles.
- Fruits: Fruit imports, particularly citrus and tropical fruits, are taxed at 15% to 30% to protect domestic agriculture.
- Livestock and Meat Products:
- Beef and Mutton: Imported beef and mutton are subject to a 20% to 25% tariff, reflecting the country’s effort to promote local livestock production.
- Poultry: Poultry products are typically taxed at 15% to 20%, encouraging domestic poultry farming.
- Sugar and Coffee:
- Sugar: Sugar is imported at a 15% tariff, which is higher than some other food staples due to its relatively high local production.
- Coffee: Coffee is taxed at a 20% duty, aligning with the country’s policy to limit non-essential imports.
Special Tariffs for Agricultural Products:
- Exemptions for Essential Food Products: Basic food items, such as rice, wheat, and certain types of oil, may qualify for reduced tariffs or even exemptions to ensure affordability.
- Regional Trade Preferences: Agricultural products imported from countries within the Eurasian Economic Union may benefit from reduced or zero tariffs under regional trade agreements.
2. Industrial Goods and Machinery
Turkmenistan is keen on industrial development, and its tariff policies reflect the importance of machinery and industrial goods in supporting the country’s manufacturing base. Machinery imports are taxed at moderate rates, while machinery used for key sectors like energy, manufacturing, and agriculture may benefit from lower duties.
Tariffs on Industrial Machinery and Equipment:
- Construction Machinery: Construction machinery, such as cranes, bulldozers, and excavators, is typically subject to a 5% to 10% tariff, with higher tariffs for specialized heavy-duty machinery.
- Manufacturing Equipment: Imported machinery used in manufacturing, including textiles and food processing, faces duties of around 5% to 15%, depending on the technology and sector.
- Electrical Equipment: Electrical equipment, including generators and transformers, is taxed at 5% to 10%, depending on the specific product.
Special Tariffs for Industrial Imports:
- Raw Materials for Manufacturing: Raw materials like metals, chemicals, and plastics that are used in domestic manufacturing processes are typically exempt from duties or benefit from reduced tariffs to foster industrial growth.
- Technology Imports: Certain advanced technology and machinery, particularly those for energy production or mining, may qualify for lower tariffs under government programs designed to promote economic modernization.
3. Consumer Goods
Imports of consumer goods, especially non-essential and luxury items, are subject to higher tariffs in Turkmenistan. The government seeks to limit the consumption of foreign-made products that could potentially harm domestic industries or deplete foreign currency reserves.
Tariffs on Consumer Goods:
- Electronics: Electronics, including smartphones, computers, and televisions, are taxed at 15% to 25%, depending on the item. More expensive or luxury electronics may face tariffs toward the higher end of the scale.
- Clothing and Textiles: Clothing imports are taxed at 25% to 30%, reflecting efforts to protect the local textile and garment industries.
- Furniture: Imported furniture faces a tariff of around 25%, depending on the type of product and its materials.
Special Tariffs for Consumer Goods:
- Luxury Goods: Non-essential luxury goods such as high-end cars, designer clothing, and luxury watches face the highest duties, which can range from 40% to 50%.
- Non-Essential Goods: Many consumer goods that are classified as non-essential or luxury imports are taxed at higher rates to reduce the economic burden of excessive imports.
4. Pharmaceuticals and Chemicals
Turkmenistan’s pharmaceutical sector relies heavily on imported medicines and medical supplies. The government regulates tariffs on pharmaceutical products to ensure accessibility while encouraging local manufacturing of some drugs.
Tariffs on Pharmaceuticals:
- Medicines: Import duties on pharmaceutical products are typically between 5% and 10%, although life-saving medicines and essential drugs may be granted exemptions or reduced duties.
- Medical Equipment: Medical equipment, such as diagnostic tools, surgical instruments, and other health-related devices, is taxed at 10% to 15%.
Tariffs on Chemicals:
- Agricultural Chemicals: Fertilizers and pesticides are taxed at 5% to 10%, reflecting the importance of these products for the local agriculture sector.
- Industrial Chemicals: Chemicals used in manufacturing, including solvents and plastics, are typically taxed at 10% to 20%.
5. Automobiles and Vehicles
The automobile market in Turkmenistan is highly regulated, and the government imposes significant tariffs on the importation of vehicles. These tariffs are designed to support the development of the domestic automotive industry and reduce reliance on imported vehicles.
Tariffs on Automobiles and Vehicles:
- Passenger Cars: Passenger cars, especially those with larger engines, are subject to high tariffs of 30% to 50%, depending on the vehicle’s value and size.
- Commercial Vehicles: Trucks, buses, and other commercial vehicles are taxed at 15% to 25%, depending on the size and purpose of the vehicle.
Special Tariffs for Automobiles:
- Electric Vehicles (EVs): To promote environmentally friendly transportation, electric vehicles may benefit from reduced import duties or exemptions under certain government incentives.
- Government Exemptions: The government occasionally offers exemptions or reductions on vehicle tariffs for official or public sector purchases.
Country Facts
- Formal Name: Turkmenistan
- Capital City: Ashgabat
- Largest Cities: Ashgabat, Mary, Turkmenbashi
- Population: Approximately 6 million (2023 estimate)
- Official Language: Turkmen
- Currency: Turkmen Manat (TMT)
- Location: Turkmenistan is located in Central Asia, bordered by Kazakhstan to the northwest, Uzbekistan to the northeast, Afghanistan to the southeast, and Iran to the south. It has a coastline along the Caspian Sea to the west.
Geography, Economy, and Major Industries
Geography: Turkmenistan is characterized by vast deserts, including the Karakum Desert that covers much of the country’s territory. The Caspian Sea provides the country with a coastline for trade and fishing, while the Kopet Dag Mountains mark the southern border with Iran.
Economy: The Turkmen economy is highly dependent on its rich natural gas reserves, making it one of the leading exporters of natural gas in the world. The government has focused on diversifying the economy through industrial development, agriculture, and tourism.
Major Industries:
- Natural Gas: Turkmenistan has some of the largest natural gas reserves in the world, making energy exports the backbone of the economy.
- Agriculture: Cotton is one of Turkmenistan’s main agricultural exports, along with other crops like wheat, fruits, and vegetables.
- Textiles: The textile industry, particularly cotton processing, is another key sector.
- Construction: The construction sector has seen rapid growth, driven by government investments in infrastructure development.
