Restaurant, hotel owners in Uzbekistan fear of losing income due to tax reform

Business Materials 6 November 2018 16:09 (UTC +04:00)

Baku, Azerbaijan, Nov. 6

By Leman Zeynalova - Trend:

The Association of Restaurateurs and Hoteliers of Uzbekistan has initiated a discussion of the concept of tax reform in the country, Uzbekistan News reported.

According to the planned innovations, beginning from January 2019, it has been envisaged to switch over the enterprises possessing the annual turnover (revenue) for the previous year exceeding 1 billion soums or having reached the established threshold within one year, to payment of the generally established taxes, including VAT (20 percent).

At the same time, the situation is already quite complicated - this sector has the highest single tax payment. While the manufacturers pay 5 percent tax and the trade enterprises pay 4 percent tax, the public catering enterprises pay 10 percent tax.

According to the new concept of tax reform, almost all catering enterprises will switch to the payment of generally established taxes (including VAT and income tax).

The representatives of this industry believe that these changes will entail extremely negative consequences. In case of paying a summed-up tax at the rate of 30 percent, half of the catering establishments will close down, and the remaining half will be forced to raise prices substantially.

In addition, the members of the association drew attention to the fact that at present, the activities of restaurants specializing in the development and popularization of Uzbek cuisine are mistakenly viewed outside the sphere of tourism. Meanwhile, just the gastronomic tourism is the most promising branch of tourism for attracting guests to the country.

The Association of Restaurateurs and Hoteliers of Uzbekistan proposes to establish a working group for development of a system of transparent functioning of the sector, to arrange a productive dialogue between government and business circles.

Moreover, it is noted that this sector does not need benefits and preferences. The restaurateurs insist on a differentiated approach to VAT, adopted in many developed countries.