Uzbekistan to simplify its tax system
By Kamila Aliyeva
The system for assessing legislative acts has submitted for public discussion a draft concept of reforming the tax system in Uzbekistan, which provides for reducing the tax burden, reducing the VAT rate, unifying and abolishing a number of taxes and mandatory payments, as well as measures to improve tax administration.
In particular, the document suggests that the corporate profit tax will be abolished (with the exception of commercial banks and insurance organizations), with the establishment of an order according to which only dividend-paid profits will be subject to dividend tax at a rate of 25 percent, podrobno.uz reported.
It is also proposed to reduce the VAT rate from 20 to 12 percent, with the extension of the obligation to pay it to all categories of taxpayers, including individual entrepreneurs with a turnover of over 1 billion soums.
In addition, it is planned to cancel all mandatory payments charged to state trust funds from the turnover of legal entities.
In recent years, the country has taken a number of measures 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 as it does not allow to increase 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.
A high level of tax burden leads to the withdrawal of capital in the ‘shadow’ turnover. A significant difference in the level of tax burden between small and large business entities (an average of 3-4 times) hinders the expansion of production and the enlargement of business entities.
Earlier, it was reported that the entire tax system of Uzbekistan will be revised until July 1, 2018. Uzbek President Shavkat Mirziyoyev previously signed a decree which provides for the introduction of a number of new measures aimed at stimulating entrepreneurial activity in terms of fiscal policy from January 1, 2018.
In particular, the concept of tax holidays, which are provided to conscientious taxpayers faced with temporary financial difficulties for a period of up to twenty four months from the date of the relevant decision, appeared in the country's legislation for the first time.
Conscientious taxpayers are considered those who have fulfilled their tax obligations in full and on time during the past two years. At the same time, a delay in the payment of tax debts can be made with respect to all or part of the tax debt.
This relief also applies to payers of a single tax payment for a period of up to one year from the date of state registration.
In addition, Uzbekistan introduces a modern form of control - tax monitoring, which provides for an extensive information exchange between tax authorities and conscientious taxpayers with the provision of comprehensive assistance in solving current tax issues.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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