Tashkent, Uzbekistan (UzDaily.com) – State budget revenues of Uzbekistan made up up 58.2 trillion soums in the first half of 2020.

The bulk of the state budget revenues are provided from tax and customs revenues. At the same time, the share of non-tax sources is increasing - primarily due to the growth of dividend receipts (part of the profit) on the state share.

The revenues of the State budget of the Republic of Uzbekistan in the first half of 2020 reached 58.2 trillion soums, or 7.5 trillion soums more than the same period of last year. In general, as of 1 July 2020, tax revenues reached 45.9 trillion soums, which is 6.8 trillion soums (17.2%) more than the same period of last year.

Tax revenues for the first half of the year increased, despite a decrease in tax revenues in the second quarter due to a decrease in economic activity and tax incentives provided during the coronavirus pandemic.

The bulk of the revenues of the State budget is generated from the following taxes: VAT - 14.3 trillion soums (24.6% of total revenues), income tax - 11.8 trillion soums (20.3%), personal income tax - 7.3 trillion soums (12.5%), tax for the use of subsurface resources - 7.6 trillion soums (13%) and excise tax - 5.8 trillion soums (10%).

Value added tax

Value added tax (VAT) receipts for the period January-June of this year made up 14.3 trillion soums, which is 2 trillion soums less compared to the same period of last year.

It should be noted that when tax receipts are recorded in the reports, the refund amount reduces the collected tax amount. Thus, the amount collected made up 15.9 trillion soums, or 0.9 trillion soums less than the same period of last year.

At the same time, the amount of VAT refunded to taxpayers made up 1.6 trillion soums in the first half of 2020 alone. It increased more than 3 times compared to the same period of last year, which ensured the return of their working capital to enterprises.

The following factors influenced VAT receipts in the first half of this year:

- reduction of the VAT rate from 20 to 15% (from 1 October 2019);

- introduction of the Tax Code in a new edition. In particular, if previously negative VAT was reimbursed only to exporters, now - to all taxpayers. VAT on acquired fixed assets is refunded not in equal installments within 12/36 months, but at a time;

-decrease in economic activity of business entities in the second quarter of this year, due to the introduction of quarantine restrictions to prevent the spread of coronavirus infection.

VAT receipts administered by tax authorities made up 8.1 trillion soums in the first half of this year. At the same time, this year there was a decrease in VAT revenues in the II quarter compared to the first quarter by more than 0.6 trillion soums. In particular, the decrease in revenues fell on the month of May (by almost 30%) and was due to the introduced quarantine restrictions in April.

The easing of quarantine restrictions in the month of May also affected the receipts in June, which reached the level of March this year. The widespread introduction of electronic invoices has also played a role in tax collection.

Along with this, the increase in the number of VAT payers had a positive effect on receipts. So, as of 1 July 2020, the number of VAT payers was 97,815 entities, which is 12,042 entities more compared to the beginning of the year. On July 20 of this year their number exceeded 105 thousand.

VAT receipts administered by customs authorities made up 7.8 trillion soums in the first half of this year. At the same time, tax revenues in the current year in the II quarter exceeded the receipts of the I quarter by 4.1 percent and made up 4 trillion soums. At the same time, a grace period of up to 120 days was granted to 1,698 legal entities in the amount of 811 billion soums.

Income tax

For the period January-June 2020, income from income tax made up 11.8 trillion soums, or 5.1 trillion soums more compared to the same period of last year. The growth in revenues is due to:

-increase in the base rate of income tax from 12 to 15%;

- changes in the taxation of mining enterprises;

- growth in prices for precious metals in the first half of this year.

In particular, in the total amount of income tax on profit in the first half of the year, 65% falls on the mining industry.

At the same time, the amount of income from income tax in the II quarter decreased compared to the first quarter. The proceeds in the 1st quarter were due to the results of financial and economic activity for the 4th quarter of the last year, as well as advance payments calculated based on the profit of the previous year.

If we exclude the tax on profits from mining enterprises, tax revenues in the second quarter decreased by 30 percent compared to the first quarter.

To reduce income tax on profit in the II quarter of this year influenced by the following factors:

-decrease in economic activity of subjects entrepreneurship, due to the introduction of quarantine restrictions in the second quarter of this year to prevent the spread of coronavirus infection;

- granting the right to taxpayers to submit a certificate of the amount of advance payments for income tax starting from the second quarter of 2020, based on the expected volume, with the abolition of the requirement for its calculation based on the results of the previous quarter.

As a result:

-more than 2,200 enterprises that previously paid advance payments submitted “zero” certificates on advance payments;

- about 4500 enterprises submitted certificates with a decrease in the volume of profits in comparison with the submitted tax reporting for the first quarter.

Personal income tax

In the first half of this year, income from personal income tax made up 7.3 trillion soums, which is 1.1 trillion soums more compared to the same period of last year.

The main factor that influenced the dynamics of tax revenues was the growth of the total wage fund and the increase in the minimum wage by 18% (comparison of the first half of this year with the same period of last year). In addition, the reduction of the social tax rate for enterprises with state participation from 25 to 12% also allowed to increase the wages of employees.

At the same time, this year there is a decrease in income from personal income tax in the II quarter compared to the first quarter, due to the following main factors:

- the decline in economic activity in April this year, which entailed a decrease in the wage bill in the private sector. This decrease was partially offset by payments of vacation pay, including in the public sector, during the period of the adoption of strict quarantine restrictions;

- an increase in the amount of tax-free material assistance paid to an employee from 4.22 to 7.5 times the minimum wage in 2020.

Thus, according to preliminary estimates, the decrease in economic activity in the private sector and the resulting decrease in the taxable wages fund led to a decrease in personal income tax revenues in the second quarter of this year relative to the initial forecasts by more than 500 billion soums.

At the same time, the decrease in the social tax rate from 12 to 1 percent since May of this year for small businesses and certain sectors of the economy during the pandemic, along with the weakening of quarantine measures, made it possible to increase the number of employees in the non-state sector by 16 percent compared to April, and the wages fund - by 22 percent.

Sales tax

In January-June 2020, revenues from this tax made up 630 billion soums and compared to the same period of last year decreased by 307 billion soums. This is due to:

- the transfer of a part of payers to pay the generally established taxes when the turnover at the end of the year exceeds 1 billion soums;

-decrease in economic activity in the second quarter of this year;

-provision in these conditions of deferrals or installments for the payment of value added tax.

Resource taxes and property tax

Total receipts from resource taxes and property tax for the first half of this year made up 9.7 trillion soums, which is 0.5 trillion soums more compared to receipts for the same period in 2019.

- Revenues from the tax for the use of subsoil in the first half of 2020, compared to receipts for the first half of 2019, increased by 0.8 trillion soums and made up 7.6 trillion soums due to:

- Growth in the current half of the price of gold in the precious metals market by an average of 26 percent compared to the first half of 2019. Additional receipts from this tax for mining enterprises made up about 5.5 trillion soums;

- The indexation of tax rates established in absolute amounts by 15 percent and the establishment of taxation for certain types of minerals based on the established rates, but not less than their fixed size. Additional receipts made up about 0.08 trillion soums.

Revenues from property tax, land tax and tax for the use of water resources in the first half of this year, compared to revenues for the same period in 2019, decreased by 0.3 trillion soums and made up 2.1 trillion soums.

Revenues in the first half of 2020 from resource taxes and property tax were provided by:

- indexation of tax rates (by 1.15 times) for land tax and tax for the use of water resources;

-increase from 1 January 2020, tax rates for the use of water resources for enterprises - producers of alcoholic beverages, except for beer and wine (60 times), in terms of the volume of water used for their production - 30.4 billion soums;

- involvement from 1 January 2020 in taxation of fully depreciated buildings, for which property tax is calculated based on its revalued (market) value - 7.8 billion soums;

- transferring to the category of payers of these taxes from 1 January 2020, markets, agricultural producers, as well as legal entities engaged in touring and concert activities;

- expansion from 1 April 2020, the range of objects subject to taxation. As a result, property tax receipts in the first half of this year increased by 13.9 billion soums, and land tax receipts - by 7.1 billion soums. Such objects include public railways, trunk pipelines, communication and power transmission lines, real estate objects, for which the Cabinet of Ministers of the Republic of Uzbekistan has made a decision on their conservation, as well as land plots occupied by these objects are subject to reduced property tax rates (0 , 2%) and land tax (coefficient 0.1 to tax rates).

At the same time, revenues from land tax and tax for the use of water resources in the current half of the year remained practically at the level of the first half of 2019.

In the first half of this year, revenues from property tax of legal entities decreased by 264.9 billion soums, land tax from legal entities - by 36.9 billion soums and tax for the use of water resources - by 3.3 billion soums. The main reason for the decline is the provision of a number of tax benefits and preferences to business entities by decisions of the President of the Republic of Uzbekistan during the coronavirus pandemic (II quarter).

So, in connection with the measures taken to support the population and business entities during the coronavirus pandemic, from 1 April 2020, business entities were provided with an interest-free deferral (installment plan) for property tax, land tax and tax for the use of water resources under a simplified system on the conditions provided for in decrees of the President of the Republic of Uzbekistan dated March 19, 2020 No. UP-5969 and dated April 3, 2020 No. UP-5978.

At the same time, according to the Decree of the President of the Republic of Uzbekistan dated May 18, 2020 No. UP-5996, small businesses were provided with additional support in the form of writing off the amounts of property tax and land tax payable for April and May 2020, for which an interest-free deferral was provided ( installment plan) in accordance with the decrees of the President of the Republic of Uzbekistan dated March 19, 2020 No. UP-5969 and dated April 3, 2020 No. UP-5978.

Thus, 17,247 small businesses were charged with property tax and land tax in April and May 2020 for a total of 29.5 billion soums, of which property tax - 11.6 billion soums and land tax - 17,9 billion soums.

Along with this, the Decree of the President of the Republic of Uzbekistan dated May 18, 2020 No. UP-5996 for the period from June 1 to September 1, 2020 envisages exemption from property tax and land tax for:

- small business entities;

-markets and shopping malls;

- cinemas, catering establishments,

- public transport enterprises, sports and recreation facilities;

- legal entities carrying out transportation activities

- passengers, the provision of personal services, the provision of premises for rent, including for banquets. This privilege was used by 22161 small businesses and 9771 public catering enterprises, markets and others for a total of 176.2 billion soums.

Also, the Decree of the President of the Republic of Uzbekistan dated April 3, 2020 NoUP-5978 envisages exemption for the period from April 1 to December 31, 2020 from paying property tax and land tax of tour operators, travel agents and tourism entities providing hotel services (accommodation services), JSC Uzbekistan Airways and its structural divisions, Uzbekistan Airports JSC and State Unitary Enterprise Center Uzaeronavigatsiya. This privilege was used by 1,764 entities for a total amount of 69.1 billion soums, of which 1,746 tour operators, travel agents and tourism entities providing hotel services, in the amount of 24.8 billion soums and 18 structural divisions of Uzbekistan Airways JSC - 44.3 billion soums

In addition, in the first half of this year, the proceeds from the property tax of legal entities, compared to the proceeds for the same period in 2019, also decreased due to the fact that in February 2019, the final amount of tax for 2018, taking into account current payments, was transferred to the budget. calculated at a rate of 5 percent.

For reference, from 1 January 2019, the tax rate on property of legal entities has been reduced from 5 to 2% and has been retained at 2% for 2020.

During the reporting period, non-tax payments administered by the State Tax Committee made up 2.9 trillion soums, of which state duty - 0.5 trillion soums, fines 0.3 trillion soums, fees - 0.5 trillion soums, the state’s share in profitable products for production sharing agreements - 0.2 trillion soums, dividends on the state share and deductions from the net profit of state unitary enterprises - 1.2 trillion soums and 0.2 trillion soums - other receipts (lease of state property and others).

At the same time, due to the tightening of quarantine restrictions, the budget did not receive state fees in the amount of 111 billion soums, fines - 38 billion soums and fees - 147 billion soums.

The Law of the Republic of Uzbekistan dated 09.12.2019 No. ЗРУ-589 "On the State Budget of the Republic of Uzbekistan for 2020" introduced a mandatory payment of dividends on the state share in the amount of at least 50 percent from the state unitary enterprises and companies with the state share in the authorized capital in the amount of 50 percent or more.

Dividends accrued to the share of the state on the net profit received in 2019 at enterprises and organizations, the state share in the authorized capital of which is 50 percent or more, including those received in 2020.

As a result of the implementation of the above measures, in the first half of this year, dividends from these enterprises (except for mining) were received in the amount of 1.1 trillion soums, which is 0.9 trillion soums more than in the same period of last year.

In addition, as part of the execution of the resolution of the Cabinet of Ministers of the Republic of Uzbekistan dated 04.16.2020 No. 232, 50% of the balance of funds in national and foreign currencies, available as of April 16 of the current year on deposit accounts in commercial banks, were transferred to the republican budget. at the expense of deductions from taxes, compulsory fees, duties and fines accumulated on off-budget accounts by state authorities and administration, courts and prosecutors, ministries and departments. Also, the norms of deductions to the budget and extra-budgetary funds of ministries and departments have been temporarily revised.

These measures made it possible to mobilize funds in the first half of this year in the amount of about 260 billion soums to compensate for the loss of budget revenues due to the spread of the coronavirus pandemic.