Baku, Azerbaijan, July 5
By Fikret Dolukhanov – Trend:
Since 2005, number of general income tax payers in Uzbekistan has decreased 26 times due to introduction of a single simplified tax payment, Uzbek media reported citing First Deputy Head of the State Tax Committee (STC) of Uzbekistan Behzod Musayev.
Musaev said that a large gap in the tax burden between the simplified and general income tax payments led to the fragmentation of enterprises, since the vast majority of legal entities are striving to be among the small enterprises.
“A single tax payment for small businesses was introduced in 2005. Back then there was only one criterion: enterprises with a staff of up to 50 employees paid 5 percent of turnover as a simplified income tax. In 2011, the limit on employees was increased to 100, in 2014 – to 200,” Musayev reminded.
The deputy head of the tax department also noted that previously general income tax was paid by 73 percent of taxpayers, whereas today the figure is as low as 2.8 percent. In other words, only 15,000 companies in Uzbekistan have a turnover of over 1 billion soums.
“After imposing restrictions on number of employees of the enterprises, new ways for staying eligible for simplified tax were found, such as outsourcing, salaries paid in envelopes, fragmentation of companies,” Musaev explained.
The representative of the STC also stressed that transition to VAT payment with introduction of the new tax policy in 2019 will not lead to a rupture of the value chain and an increase in the tax burden.
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