Baku, Azerbaijan, March 30
By Fikret Dolukhanov – Trend:
Uzbekistan plans to seriously restrict the spheres of activity in which individual entrepreneurs can work, Uzbek media reported on March 30.
According to the information, Uzbek Deputy Finance Minister Vyacheslav Pak made the announcement during the discussion of the 2020 tax reform draft concept.
The document offers a critical review of the number of activities allowed for individual entrepreneurs, but at the same time allows them to hire more employees.
The simplified taxation system is also planned to be abolished, leaving as separate taxes a single land tax and a fixed tax on certain types of entrepreneurial activity carried out by individuals without the formation of a legal entity.
“We have studied the situation in detail. It requires a drastic change, as the country has developed a very wide range of activities that individual entrepreneurs can deal with. This situation is criticized not only by our expert community, but also by international organizations. In most foreign countries, individual entrepreneurs have the right to carry out only a very limited range of activities,” Pak said.
According to him, current situation makes it possible to involve individual entrepreneurs in schemes of tax optimization and tax evasion.
“We sometimes get to the point of absurdity, when one businessman has a turnover of 100 billion soums. It is obvious that he cannot do this amount of work alone. Hence, he either hides something, or is being used in schemes of tax optimization. Such facts, for example, exist in timber trade, manufacturing of metal and reinforced concrete products,” Pak said.
According to the Deputy Finance Minister, the list of activities that individual entrepreneurs can engage in is planned to be limited and optimized. He added that experts will take into account international experience in this direction, as well as local specifics, for example, a large number of craftsmen working in the country.
“Individual entrepreneurs, whose turnover exceeds 1 billion soums, will automatically pay VAT, that is, they will switch to paying general taxes, as it is done all over the world. At the same time, they will not need to change their organizational and legal form,” Pak said.
Currently individual entrepreneurs in Uzbekistan can deal with 80 different activities.