Ministry of Finance of Uzbekistan prepares a draft on the main directions of tax policy for 2021
Tashkent, Uzbekistan (UzDaily.com) -- The Ministry of Finance of the Republic of Uzbekistan prepared a draft Law of the Republic of Uzbekistan “On amendments and additions to some legislative acts of the Republic of Uzbekistan in connection with the adoption of the main directions of tax policy for 2021”.
The main directions of tax policy for 2021 envisages the preservation of the main tax rates for VAT (15%), income tax (15%, for certain categories 20%), personal income tax (12%), property tax of legal entities (2%), land tax for agricultural land (0.95%), social tax (business entities - 12% and budgetary organizations - 25%), turnover tax (base rate 4%).
At the same time, the tax policy for 2021 is aimed at continuing tax reforms that provide for the direct effect of the Tax Code, further support for exporters, equitable distribution of the tax burden and increased efficient use of natural resources.
The bill envisages the inclusion in the Tax Code of the rates of excise tax, land tax, tax for the use of water resources and tax on income of individuals, established at a fixed rate), as well as certain norms related to the application of these rates.
For 2020, these rates were established by the Law of the Republic of Uzbekistan "On the State Budget of the Republic of Uzbekistan for 2020".
For 2021, these rates have been changed as follows:
a) the excise tax envisages the equalization of the majority of excise tax rates on import and production. At the same time, the rates of excise tax, established in absolute amounts, are indexed (taking into account the abolition of their stipulated indexation from 1 April 2020).
In this regard, excise tax rates are indexed from 1 February 2021. At the same time, the rates for alcoholic products, including beer, as well as for tobacco products are indexed in 2 stages: from 1 February 2021, - taking into account the refusal of their indexation in 2020, and from 1 September 2021 - by an average of 7.5% ;
For 73 commodity items it is proposed to abolish the excise tax on imports, in particular, on food products (20 types of goods (juices, cheese, cottage cheese, margarine, confectionery products, sausages and similar meat products, etc.)), on electrical goods (35 types of goods (refrigerators, TVs, gas stoves, vacuum cleaners, washing machines, etc.)), etc. This will ensure equal conditions for business entities.
For legal entities that provide mobile services, the excise tax rate is reduced from 20 to 15 percent.
b) for land tax, base tax rates are established for non-agricultural land, in the context of regions of the republic in absolute terms, taking into account their indexation by 15 percent.
The annual indexation of land tax rates for non-agricultural land is due to the fact that the rates are set in absolute value (soums) and will allow you to keep the share of land tax in total receipts.
At the same time, the specific size of tax rates will be determined by local government bodies based on the rates established by the Tax Code, with the use of increasing and decreasing coefficients, depending on their economic development and the prestige of the area.
c) for the tax for the use of water resources, the rates are established in the context of the category of taxpayers, as well as in terms of the volume of water used for certain purposes, which entails keeping separate records of the volume of water resources used for various purposes for the purpose of calculating the tax. This measure is aimed at ensuring the rational and efficient use of water resources.
Tax rates on tax for the use of water resources are indexed by 15 percent, and for certain sectors of the economy - by 30 percent, with the aim of gradually bringing these rates up to a single tax rate established for industrial enterprises. The tax rates for the use of water resources remain at the level of 2020 for public utilities, and in terms of the volume of water used for irrigating agricultural lands and breeding (growing) fish, including dekhkan farms, a single tax rate is set at 40 soums per 1 cubic meter. m.
The bill envisages the expansion of the range of enterprises paying VAT regardless of the amount of revenue, due to: stationary outlets for the retail sale of alcoholic beverages, including beer, as well as markets and shopping malls. This will create a level playing field and prevent understatement of tax revenues by transferring the share of profits from enterprises that pay VAT to persons who do not pay this tax.
In the context of the coronavirus pandemic, the Decree of the President of the Republic of Uzbekistan dated April 3, 2020 No. UP-5978 provided that in the period from 1 April to 31 December 2020, value added tax payers whose turnover for the sale of goods (services) does not exceed 1 billion soums per month and using electronic invoices are entitled to calculate and pay value added tax on a quarterly basis. It is proposed to keep this norm in the future, and to provide it as a permanent one in the Tax Code.
The draft law envisages the possibility of offsetting VAT paid (payable) on actually received goods (services), regardless of the amount of foreign exchange earnings. This will support exporters who ship goods for export on consignment terms (with a deferred payment), and prevent the diversion of working capital. Only textile enterprises had such a right in accordance with the Decree of the President of the Republic of Uzbekistan from 5 May 2020 No. UP-5989 "On urgent measures to support the textile and garment and knitwear industry."
In order to simplify the procedure for calculating pensions, it is proposed to unify the rates of social tax for a certain category of individuals.
Thus, the bill provides that self-employed citizens, students of the Usta-Shogird school - during the period of their work until they reach 25 years of age, dekhkan farms, as well as citizens of the Republic of Uzbekistan who work abroad for hire on the basis of an employment contract, citizens of the Republic of Uzbekistan working in trading houses, representative offices (including without the formation of a legal entity), organizations created (opened) in foreign states by state bodies and other organizations of the Republic of Uzbekistan pay social tax in the amount of at least 1 size of the base calculated amount per year for calculating the length of service. Accordingly, for this category of payers, the bill specifies the deadline for payment of social tax.
The bill envisages an increase in the reduced rate on property tax of legal entities from 0.2 to 0.4 percent and a reduction coefficient from 0.1 to 0.25 applied to the rates of land tax from legal entities in relation to individual objects and land plots.
This will allow to gradually bring them to the base rate of property tax and land tax.
A reduced property tax rate and a reduction coefficient to land tax rates were introduced on January 1, 2020, in relation to objects for which tax benefits were previously granted. This measure was introduced with the aim of efficient and rational use of real estate, as well as to ensure full accounting of land owned by legal entities.
With the abolition of the single land tax (from 1 January 2020), the procedure for taxing agricultural land was retained for farms, based on their standard value for the purpose of calculating the land tax. From the same period, this procedure was also extended to other legal entities with agricultural land. At the same time, for horticultural agricultural enterprises (from 1 January 2019) and dekhkan farms, the procedure for calculating the land tax based on the rate established depending on the category of land (irrigated and non-irrigated) and the bonitet was retained.
In order to establish a unified procedure for taxation of agricultural land, the bill envisages the extension of the procedure for calculating the land tax, based on the standard value of agricultural land, to horticultural agricultural enterprises and dekhkan farms. The tax rate will be set as for agricultural land.
On the tax for the use of subsoil, the rates for individual construction minerals are unified. This will create additional conditions for the development of nonmetallic mineral deposits and ensuring their efficient extraction, especially from river beds.
As part of monitoring and analyzing the practical action and effectiveness of the norms of the Tax Code of the Republic of Uzbekistan in the new edition, a separate draft law is being developed to amend and supplement the Tax Code of the Republic of Uzbekistan based on the proposals of specialists, relevant ministries and departments, as well as tax consultants and experts.