Uzbekistan to lower VAT, cancel certain taxes
Baku, Azerbaijan, March 28
By Fikret Dolukhanov – Trend:
Uzbekistan considers a draft concept of fundamental tax reform, providing for lowering of tax burden, VAT, unification and cancellation of certain taxes and obligatory payments, as well as measures on improvement of tax administration.
The project was prepared by the National Project Management Agency under the President of Uzbekistan in accordance with the decree of the President of Uzbekistan signed on February 13, 2018.
According to the text of the draft, a number of measures have been taken in recent years in the republic to improve the tax system and tax administration.
At the same time, the current state of the tax system and tax administration still does not meet the principles of a free market economy; it does not allow increasing the competitiveness of the economy because of the continuing high tax burden on businesses, a large number of taxes and the complexity of their administration procedures.
High level of tax burden leads to the withdrawal of funds to the shadow turnover. A significant difference in the level of tax burden between small and large business entities (3-4 times in average) hinders the expansion of production and the enlargement of business entities.
The high VAT rate and complexity of the collection system lead to a diversion of the taxpayer's working capital, a rise in the cost of intermediate and final consumer products, and the lack of effective cooperation between large and small businesses.
The current system of taxing property of legal entities restrains investment in production capital facilities and infrastructure, leading to an increase in the costs of capital-intensive industries.
Imperfection of the system of taxation of incomes of individuals leads to an underestimation of the payroll and, ultimately, to "gray" salary schemes.
Inefficient tax administration generally negatively affects the level of revenues of the state budget.
These and many other shortcomings of the current system significantly reduce the investment attractiveness of the republic, because Uzbekistan does not provide easily understandable norms of tax legislation in the eyes of most investors, healthy competition, transparency of tax administration, an acceptable level of tax burden and guarantees for the protection of investors' rights.
The National Project Management Agency organizes a public discussion of the draft concept on March 29 at the Uzexpocentre exhibition complex.