Soon after declaring its independence from the Soviet Union in 1991, the country was engulfed in a bloody civil war (1992-1997) fought along ideological and regional lines. That violent conflict took approximately 35,000 lives and led to massive amounts of internally displaced persons and refugees fleeing to other countries. The former communists, who had controlled the government, fought against a coalition of opposition parties dominated by the Islamic Renaissance Party and mostly composed of people with Gharm/Qarateguine regional origin. In June 1997, the opponents signed a peace accord, pledged to cease all hostilities, and promised to form a government of national unity.
The constitution, adopted in 1994 and amended in 2000, replaced the Soviet-era version. It established executive, legislative and judicial branches of government. The president of Tajikistan is considered the head of state, elected every 7 years for a maximum of 2 terms. The president appoints cabinet members, the prime minister, and the justices within the court systems, all subject to approval by the legislature. The ruling party in 2001 was the People's Democratic Party of Tajikistan, associated with President Imomali Rahmonov. He has been in power since 1994 but his final term will expire in 2006. The prime minister acts as the head of government and directs the cabinet. In February 2000, elections were held to create a bicameral parliament.
The government generates most of its revenue from taxes. During 1996 and 1997, it maintained large budget deficits . There was a significant reduction of the deficit in 1999 to 3.2 percent of GDP and 3.8 percent in 1998. The government broadened the tax base and boosted revenue through the introduction of a new tax code in January 1999. The new code cut the number of tax categories from 45 to 17 and reduced the top rate of income tax . The government's budget deficit fell to a low of 2.2 percent of GDP in 2000. This was based mainly on the increased efficiency in tax collection and the revenue generated from privatization. The change was thought to increase tax revenue by as much as 1 percent of GDP.