Tashkent, Uzbekistan (UzDaily.com) – On 19 November, at the site of the Center for Economic Research and Reforms (CERR) under the Presidential Administration of the Republic of Uzbekistan, a new edition of the draft Tax Code (NK) was discussed in the Open Space format.

The event was attended by the Deputy Minister of Finance of the Republic of Uzbekistan D. Sultanov, the director of the Center for Economic Development and Trade O. Khakimov, the first deputy head of the Department of Tax and Customs Policy and Forecasting of Revenues of the Ministry of Finance of the Republic of Uzbekistan E. Gadoev, the head of the Department of the State Tax Committee of the Republic of Uzbekistan J. Abdiev, professor, Doctor of Economics Sh. Toshmatov, the head of the department at the Academy of Public Administration under the President of the Republic of Uzbekistan, representatives of the Ministry of Economy and Industry of the Republic of Uzbekistan, CCI of the Republic of Uzbekistan and others.

Representatives of more than 20 leading enterprises, the business community, chief accountants, auditors, tax consultants, media representatives, and bloggers also took an active part.

Director of CERR O. Hakimov addressed the roundtable with a welcoming speech. He noted that the First Government Accelerator in the “Open Space” format, which takes place at the CERR site, is designed to involve individual professionals, experts, and government agencies in general activities when necessary. At the same time, work plans arising at the Open Space site are more complex, more reasonable and more reliable than programs created by individual experts and managers.

Next, the round table presentation was presented in a new edition of the draft Tax Code (TC).

The revised tax code is intended to become a direct action document. To this end, it included provisions of by-laws governing taxation issues, including tax rates.

At the same time, the current structure of the Tax Code has been preserved, which envisafes a division into the general part (tax administration issues) and the special part (basic rules for calculating and paying taxes).

The draft Tax Code is supplemented by standards for controlling transfer pricing. Considering that the transfer price is formed in transactions between related parties and differs from the price that would be applied when making transactions between independent parties, the definition of the concepts “Related parties” and “Controlled transactions between related parties” is given.

They provide for the improvement of the mechanism for calculating and paying taxes, as well as the specification and streamlining of all elements of taxation.

Within the framework of the Open Space platform, the Deputy Minister of Finance of the Republic of Uzbekistan, D. Sultanov, named one of the main business complaints against the tax authorities, including corruption, incompetent employees and inspections.

“The first thing that confuses business is tax audits and the powers of tax authorities. I would like to state: we have analyzed all our mistakes, all our hard experience in the past and we can confidently say that from now on no inspector will have the right to independently appoint a tax audit,” Sultanov said.

According to him, all checks will go through the State Tax Committee on the basis of mechanisms to identify and prevent tax evasion schemes. At the same time, large taxpayers, regardless of their level of implementation of tax legislation, will periodically be subject to checks.

Experts told what innovations are available on value added tax:

- The right to return the “negative” VAT balance after a detailed desk audit is granted. In a simplified manner, the balance will be returned to the largest taxpayers and to those who have provided a bank guarantee. A one-time VAT offset is introduced upon acquisition (construction) of fixed assets, including real estate. It is also proposed to carry out VAT refunds according to a simplified scheme to embassies and international organizations entitled to exemption, in return for the current order of implementation by economic entities without VAT. Electronic services provided by non-residents will be taxed. Including, VAT is introduced on the leasing of state property, which will create competition with the private sector. In addition, the deadlines for submitting settlements and payments have been revised. So, for small business entities (turnover of less than 1 billion soums per quarter), the deadline for submitting the calculation is set quarterly, ─ instead of its monthly presentation.

Experts proposed to conduct an experiment in the form of ND monitoring for two years. As a result of which experts will be able to give an opinion and make appropriate changes.

Based on the results of discussions, the business community and experts proposed creating an “Expert Council”, within the framework of which the issues of improving the tax code for regulation and making amendments will be regularly discussed.

Also at the event, international experience was studied. In particular, practice shows that a fixed VAT can affect household welfare. CERR experts provided an example of a study on the impact of VAT on income distribution in Ireland. According to the study, the one-dimensional VAT system is regressive, which means that flat rates on all goods and services have a greater impact on low-income households in rural areas, households of 6 people and households with one adult with children.

On the part of the CERR, it was proposed to conduct a study on the impact of the Tax Code on macroeconomic stability, the business environment, the welfare of the population, the development of entrepreneurship, and also to study further changes.

The participants of the event shared their proposals on the problematic issues of the new edition of the Tax Code.

During the event, a lively discussion and discussion of the innovations of tax legislation took place, comprehensive answers were given using practical examples.