During a recent meeting, President Shavkat Mirziyoyev underscored the critical imperative of keeping the budget deficit within 4% of the Gross Domestic Product (GDP). The President directed regional leaders to uphold financial discipline and take decisive actions in instances of non-repayment of budget loans.
A particular emphasis was placed on tax collection, revealing disparities across regions. While tax revenues in Syrdarya and Jizzakh experienced a commendable 20% increase, Khorezm, Bukhara, and Kashkadarya lagged behind with an increase of less than 7%.
Tackling Tax Challenges in Specific Industries:
Certain industries face acute challenges in tax compliance. For instance, within the catering sector comprising 18,000 enterprises, only 2,300 are contributing to the Value Added Tax (VAT). Multiple establishments exploit registration loopholes by creating 3-4 companies, each with turnovers below the UZS 1bn ($80,892) threshold.
In response to these challenges, a comprehensive overhaul of tax administration and the functions of tax inspectors is on the horizon. Notable structural changes include:
1. Integration of Budgetary Institution Oversight
A dedicated inspection unit within the Tax Committee will assume responsibility for overseeing budgetary institutions, integrating seamlessly with the treasury system.
2. Specialized Inspection for Tax Debt Collection
A specialized inspection will be established to address tax debts, inheriting several powers from the Compulsory Enforcement Bureau.
3. Restructuring Engagement with Major Enterprises and Banks
Reorganization of engagement with the 80 largest enterprises and 35 banks, pivotal contributors to tax revenues, will see the creation of a specialized unit within the Inspectorate for Large Taxpayers.
Reviewing Customs Benefits: An Assessment for Fiscal Prudence
In a bid to assess their feasibility, President Mirziyoyev announced a review of customs benefits. In 2023, import goods valued at $20bn benefitted from customs benefits totaling UZS 60 trillion ($4.8bn). A meticulous examination revealed misuse in 13% of cases, amounting to UZS 420bn ($33.9mn). The Customs Committee has been tasked with conducting individual assessments to scrutinize the validity and effectiveness of each benefit.
2024 Fiscal Directives: Additional Revenues and Fiscal Targets
For the year 2024, the President has mandated the Tax Committee to secure an additional UZS 40 trillion ($3.2bn) through supplementary sources, while the Customs Committee is directed to generate an additional UZS 15 trillion ($1.2bn).
President Shavkat Mirziyoyev's directives underline a strategic commitment to financial discipline, tax transparency, and the efficient utilization of fiscal resources to fortify Uzbekistan's macroeconomic stability and propel sustainable economic growth.
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