The main direction of the Concept is to reduce the level of tax burden on the economy, as well as to eliminate imbalances in the level of tax burden between business entities that pay taxes on a simplified and generally established taxation system.

The concept envisages optimization of the number of taxes through their unification, as well as the consolidation of taxes, which have a similar tax base, reducing and simplifying tax reporting, and minimizing operating expenses.

Simplification of tax legislation, elimination of contradictions and conflicts in normative legal acts in the field of tax relations, strengthening of protection of rights and legitimate interests of bona fide taxpayers are the main directions of the concept of improving the tax policy of Uzbekistan.

Uzbekistan also plans to maintain a favorable regime for foreign investors and investments, their full support and reliable legal protection.

Starting from 1 January 2019, within the framework of the Tax Policy Improvement Concept, Uzbekistan plans to reduce the tax burden on the payroll by:

• introduction of a single tax rate on personal income at the size of 12 percent for all citizens, of which 0.1 percent is directed to individual accumulative pension accounts. At the same time, the current procedure for the exemption of income from certain categories of citizens from taxation in the amount of 4 minimum wages will be kept;
• abolition of insurance premiums of citizens to the extra-budgetary Pension Fund, withheld from the income of citizens in the form of wages;
• establishing, in order to ensure the sustainability of the pension system, a single social payment of 25 percent for budget organizations and state enterprises, legal entities with a state share in the statutory fund (capital) of 50 percent or more, legal entities in the authorized fund (capital) of which 50 percent or more belongs to a legal entity with a state stake of 50 percent or more, and their structural units, as well as a reduction in the rate of this payment from 15 to 12 percent for the remaining legal entities;

Uzbekistan will also take measures to improve the taxation of payers of generally established and simplified taxes with the optimization of taxes on turnover (proceeds), as well as the criteria for transition to a simplified taxation regime by:

• abolition of mandatory contributions to state trust funds, levied on the turnover (proceeds) of legal entities;
• reduction in the corporate profit tax rate from 14 to 12 percent, for commercial banks from 22 to 20 percent, as well as increases for legal entities providing mobile communication services (cellular companies) from 14 to 20 percent, with the cancellation of the procedure for calculating tax on superprofits, depending on the level of profitability;
• reduction in the rate of income tax levied at the source of payment, on income in the form of dividends and interest from 10 to 5 percent;
• transfer of enterprises that have annual turnover (revenue) for the previous year more than 1 billion soums or reached the established threshold during the year, to pay general taxes. At the same time, the established threshold of annual turnover (revenue) of 1 billion soums is subject to revision at least once every 3 years;
• introduction for all business entities, including legal entities that have a turnover (revenue) up to 1 billion soums, property tax of legal entities, land tax and a tax for the use of water resources;
• improvement of the procedure for calculating and paying the excess profit tax, including the introduction of payment of royalties;

Measures will be implemented to reduce the negative impact of improving the tax policy on payers of a simplified taxation regime, by:

• reduction of the property tax rate of legal entities from 5 to 2 percent while maintaining the procedure for calculating the tax at higher rates for legal entities that inefficiently use buildings and structures, including those previously privatized;
• establishment for taxpayers with annual turnover (revenue) up to 1 billion soums, the procedure for calculating and paying turnover tax (revenue) with a base rate of 4 percent and with the possibility of paying value-added tax on a voluntary basis;
• preservation of the taxation procedure for single land tax payers;

Also, the procedure for calculating and paying value-added tax and excise tax is improved by:

• keeping the current rate of value added tax at a rate of 20 percent with the introduction of a full-fledged tax offset system, specifying the tax base and reducing the number of benefits, as well as the subsequent reduction in the rate of this tax in 2019;
• granting the right to credit the amount of value-added tax on acquired fixed assets, objects of construction in progress and intangible assets that are currently included in their value;
• association of excises and duties from manufacturers of alcoholic beverages and tobacco products established per unit of output, with the transfer of funds to the national budget for the financing of relevant activities.

The head of Uzbekistan instructed, by 1 November 2018, to prepare proposals on abolition of ineffective tax and customs privileges and preferences, and the introduction of the procedure for providing permanent tax and customs privileges, respectively, by the Tax and Customs Codes of the Republic of Uzbekistan.

Prior to 1 December 2018, it was entrusted to ensure the development of the draft of the Tax Code of the Republic of Uzbekistan in a new version, with the involvement of experts from the International Monetary Fund, the World Bank and other organizations, based on the main directions of the Concept of improving the tax policy of the Republic of Uzbekistan, ensuring its broad public discussion.

The Ministry of Finance of the Republic of Uzbekistan was instructed to take measures to organize interaction with the International Monetary Fund and the World Bank to receive technical assistance in the preparation of the draft Tax Code of the Republic of Uzbekistan in a new edition and reforming the tax system of the Republic of Uzbekistan.

The Cabinet of Ministers of the Republic of Uzbekistan was entrusted in a two-month period to approve a set of measures aimed at preventing a sharp increase in the administrative expenses of taxpayers for the fulfillment of tax obligations, providing for:

The government will also take measures to improve the skills of employees of the state tax service and taxpayers, including the calculation and payment of value added tax and corporate income tax.

The President instructed to simplify tax reporting and ensure its integration with software products for the introduction of automated accounting;

The government of Uzbekistan should review and reduce the types of activities permitted for the implementation of individual entrepreneurs.