Tashkent, Uzbekistan (UzDaily.com) -- The Ministry of Finance of Uzbekistan presented the information publication “Budget for Citizens”, dedicated to the draft State Budget for 2020. This was reported by the press service of the State Tax Committee.

The publication presents the projected revenues and expenditures of the State budget and state trust funds for 2020, as well as targets for 2021–2022. It clearly shows what changes in the preparation of the State Budget for 2020, what taxes will go into the republican and local budgets and what changes will be in their expenses. Some changes are planned to be made in the calculation of taxes.

VAT: the calculation mechanism is changing

From 1 October  2019, the rate of value added tax decreased from 20 to 15%. This is provided for by the Decree of the President “On measures to further improve the tax policy of the Republic of Uzbekistan” of September 26, 2019.

The draft budget for 2020 includes the abolition of simplified VAT. As you know, differentiated rates do not simplify, but rather complicate the mechanism for calculating VAT. For example, multidisciplinary enterprises must keep separate records for each type of activity for which different rates are provided. Therefore, from 2020 it is planned to abandon simplified VAT and leave only VAT at 15%.

Profit tax is optimized

In Uzbekistan, today, one of the lowest income tax rates. For example, in Belarus the profit rate is 18%, in Russia - 20%, in Kazakhstan - 20%, in Tajikistan - 23%.

The draft budget for 2020 includes a slight increase in income tax. An increase in the base rate is expected from 12% to 15%. It is planned to maintain a 20% income tax rate for commercial banks, mobile operators and companies producing cement (clinker) and polyethylene pellets.

The total tax burden on investor profits in Uzbekistan also maintains one of the lowest rates among the CIS countries - 16.4%. For comparison, in Kazakhstan this rate is 24%, in Belarus - 28.7%, in Russia - 30.4%, in Tajikistan - 32.2%.

The tax burden of individuals is leveled

The next year’s draft budget for citizens envisages a change in the taxation of entrepreneurs and members of family business.

In 2020, instead of a fixed tax, they will pay a fixed income tax on personal income. In addition, they will receive the right to pay tax on income actually received on the basis of a statement of comprehensive annual income.

At the same time, the project stipulates equalizing the tax burden on the wage fund. In particular, by 2020 it is planned to reduce the single social payment rate from 25% to 12% for state enterprises, legal entities with a state share in the authorized capital of 50% or more, as well as their structural divisions. For budgetary organizations and other payers, the CAP rate is planned to be maintained at 25% and 12%, respectively.