The Ministry of Justice announced on September 5 that President Shavkat Mirziyoyev has decreed changes in the tax system, focusing on more streamlined and fair practices.
These changes come after the President's dialogue with business leaders on August 18, where he criticized the overreach of tax authorities and cited instances of corruption.
Effective immediately, the controversial tax gap coefficient for returning overpaid VAT is abolished. 70% of entrepreneurs considered this mechanism to be unfair. The policy of suspending a company's VAT payer certificate, which occurred when a company was categorized as high-risk, has also been canceled.
The President has also raised the profit threshold for companies eligible to pay income tax in installments. The limit is now UZS 10 bn ($ 82,4172.65), up from the previous UZS 5 bn ($41,2086.32).
In a move towards greater transparency, tax inspectors are now forbidden from:
- Entering company premises or conducting surveillance
- Demanding documents from business owners or summoning them to tax offices
- Seizing documents or items from taxpayers
The President had previously expressed disapproval of these inspection methods, describing them as being used like "weapons" by tax authorities.
Starting January 1, 2024, tax disputes between entrepreneurs and the tax authorities will shift from economic courts to administrative courts. Additionally, the time limit for tax authorities to file claims against entrepreneurs will be shortened from 5 years to 3 years.
The decree also brings relief in terms of loan burdens for both businesses and individuals. Once a court rules on the collection of a debt, any penalty accrual on that debt will cease. Payment prioritization is also addressed; if a debtor cannot fully settle a debt, payments will first go towards clearing the principal and past interest, followed by current interest and principal, and finally any penalties.
These reforms aim to create a more equitable and business-friendly tax environment, reducing administrative burdens and enhancing judicial fairness.
On August 5 President Mirziyoyev also announced the official transformation of Qishloq Qurilish Bank to Biznesni Rivojlantirish Banki (Business Development Bank), highlighting Uzbekistan's willingness to diversify its economy and create a favorable business environment for entrepreneurs.