Tashkent, Uzbekistan (UzDaily.com) -- On December 20, a meeting on the issues of full implementation of the new concept of tax policy was held under the chairmanship of the President of the Republic of Uzbekistan Shavkat Mirziyoyev.

A transparent and fair tax system is one of the most important conditions for economic development. However, the presence of many inaccuracies in the tax administration that was in effect up to now has hampered the development of business, entrepreneurship and investment. The high level of tax rates worked against bona fide taxpayers.

For example, business entities deducted 3.2 percent of the volume of trade to the state trust funds, regardless of how much profit the company received. This tax burden amounted to at least 21 percent of the company’s income and hindered the production of competitive and export-oriented products.

To eliminate such problems, alleviate the tax burden and develop a truly market economy, the Concept of Improving the Tax Policy of the Republic of Uzbekistan was developed at the initiative of the Head of the state.

The concept, adopted with the involvement of experts from the International Monetary Fund, the World Bank and other organizations based on the experience of developed countries, provides extensive business opportunities and conditions that make its management as convenient as possible in accordance with international requirements.

Thus, starting from the next year, the types of taxes to be reduced from 19 to 15. The tax rate on profit of legal entities to be reduced from 14 to 12 percent, and the tax on profits in the form of dividends and interest – from 10 to 5 percent.

It is also important that henceforth tax rates will not change sharply, as before, but will be more predictable. This will allow investors to confidently plan long-term business projects.

The above procedure for payment of deductions from trade turnover to be abolished in the new tax concept. As a result, large enterprises will be able to leave more than 5 trillion SOUMS at their disposal.

Due to these and other indulgences, the International Monetary Fund has recognized the reform of the tax system as one of the greatest success of Uzbekistan.

In short, a new tax administration system has been created. The next task is to ensure its full implementation in practice.

At the meeting on the issues of full implementation of the new concept of tax policy, measures for the rational adjustment of the new system were identified.

Starting from January 1, 2019, all entities, regardless of the number of employees, who have a turnover of more than 1 billion SOUMS, will pay the generally established tax payment.

Naturally, the question arises: why was the decision taken to increase the number of payers of the generally established tax?

The gap between the tax burden of single tax payers and payers of the generally established tax is excessively large, which does not stimulate the consolidation of small business. Despite the fact that world-famous brands such as Adidas, Nike, Indesit, Knauff, at one time began their activities as small family enterprises and due to appropriate incentive mechanisms, turned into large companies.

Speaking about this, the President asked the question: when will Uzbekistan have such big brands?

It was noted that it is necessary to improve the qualifications and practical skills of employees of territorial tax authorities in calculating the generally established taxes, to conduct appropriate training for accountants of business entities.

Instructions were given on assigning tax officers to enterprises that are switching to paying a generally established tax, providing necessary clarifications, providing practical assistance to subjects. The need was noted for conducting by large joint-stock companies and business associations, together with specialists from the State Tax Committee, the workshops for senior employees of enterprises operating in their system.

– In calculating and maintaining reports on a generally established tax, value added tax is the most difficult, – said Shavkat Mirziyoyev. – To facilitate this process, it is planned to introduce this tax in stages in two years.

In particular, enterprises the turnover of which ranges from 1 billion to 3 billion SOUMS will pay VAT voluntarily, in a simplified manner. That is, they will not keep a separate invoice for the purchased goods and will pay tax based on turnover, differentiated by business sphere.

Issues of increasing tax collection were considered. It was noted that the work of tax authorities in this direction is unsatisfactory, tax arrears remain at places. Relevant agencies are instructed to ensure full tax revenues.

It was emphasized that the existing bureaucratic obstacles in tax administration negatively affect the activities of exporters. In particular, manufacturing enterprises exporting their products face red tape and have to appeal to the district, regional and republican tax authorities for months to refund the amount of value added tax.

In this regard, the President noted the need for introducing a simplified procedure, providing for the reimbursement of value added tax within ten days.

– The new Tax Code should fully cover all the procedures, mechanisms and methods of taxation, to be clear to all. This work is our first step towards creating a fair and stimulating tax system, – the Head of the state said.

Information of responsible managers was heard on the issues discussed at the meeting.