More and more people not satisfied with the status of conventional specialists and managers appear in the country nowadays. They strive for more, create new companies, and seek to find new niches in the market. The government is able to reverse this situation and to dramatically increase the number of small businesses and entrepreneurs, because it can stimulate businessmen through various programs of preferential loans, simplified procedures of registration, tax and statistical reporting.

New conditions An expert community has already named July 2012 as the starting point for a new stage of development of small business and entrepreneurship, and in general of the entire business environment of Uzbekistan. During the same summer month, Uzbekistan adopted two basic documents, which in the medium term will guide governmental bodies and business community to work together on improving the efficiency of interaction, as well as on ameliorating the business conditions for active and adventurous people.

Current economic realities demanded changes in the existing system of providing statistical, tax and financial reports. Many experts and businessmen themselves called it cumbersome and said that it needs radical simplification and reformation. A large number of licensing requirements and licensing procedures were not consistent with the principles of market economy and existing policy to further liberalize the economy. They often duplicated other instruments of government regulation.

It is worth noting that the work to improve the system of course was not launched in July this year. Several special experts working groups operated in the country for several years; they identified problematic areas and searched the solutions. Particular attention was paid to the opinion of entrepreneurs themselves, because they encountered on practice with the existing barriers and unnecessary procedures, and were able to advise the most effectively mechanism to use the generated resource.

The result of this great work is that now enterprises of small businesses and private entrepreneurship give only one simplified form of statistical reporting on a quarterly basis, meanwhile the financial statements are presented once a year. Over 78% of businesses have already switched to the electronic form of tax declaration. In total, 65 licensing procedures were abolished last year alone.

But the economy does not stand still. Rules of the game constantly change. That’s why to remain competitive in domestic and foreign markets it is important to track trends and improve functioning mechanisms for dealing business in accordance with international norms and standards. Therefore it was decided to abrogate 50 types of reports from July 1, 2012, and 80 licensing procedures and 11 licensed activities from 1 August.

Already, since the third quarter of 2012, 12 types of statistical and other 20 kinds of statements declared periodically will be reduced, and from 2013 other 12 types of tax and 11 types of statistical reports.

Now, accounting for the water tax is being reported monthly or quarterly depending on the amount of the tax. Since 2013, this report will be provided just once in a year. Reports of legal persons for property tax will also be provided just one time in a year.

In addition, since January 1, 2013 11 species of tax reporting and other data will be combined to five. The income tax will be combined with the tax on improvement and development of social infrastructure, while the single social payment will merge with the insurance payments of citizens to the Pension Fund. Moreover, mandatory deductions to the Pension Fund, Road Fund and the Fund for Reconstruction, Construction and Equipping of Educational Institutions And Health Care will be combined in a single payment.

Licenses issued for 4 types of licensable activities will be given in perpetuity. Ten types of licenses will be united in six. For example, the license for publishing, the examination of construction projects, and the issuance of architectural and urban planning documents will be provided for an indefinite period of time.

There is another significant change. From January 1, providing monthly reports for all types of taxes and obligatory payments, except for value added tax will be abrogated. Moreover, microfirms will be free from providing annual statistical reports. At the same time, statistical authorities will make quarterly spot check on relevant areas and spheres of activity.

The new initiatives proposed by president can significantly increase the number of entrepreneurs. Islam Karimov ordered the Government to revise the fees paid by business entities to obtain licenses and documents of allowing character to carry business activities, and to make decisions on costs cutting by at least two times.

Technological approach

Experts ascertain that introduction of modern technologies in the relationship between regulatory authorities and businesses will be the main innovation in the long term. Uzbekistan plans to gradually put the processes of reporting statistical, financial and tax accounting in electronic form till the end of 2014. It will have several important advantages. In particular, taxpayers will no longer have to visit the tax office and spend time in a queue. Moreover, the electronic system allows to correct mistakes and to re-report in a timely manner and at no costs. And, what is also important, the burden associated with the preparation and delivery of the reports is being significantly reduced.

Another important advantage is that during electronic method of reporting, direct contact between taxpayers and employees of regulatory bodies is reduced, so it makes possible to minimize the possibility of a biased human treatment.

During 2012-2016 the country will introduce a new, electronic method of applying for licenses and permits through the Internet. It will enable an applicant to observe via the Internet how his application is being treated by public officers. This is a serious step toward more openness and transparency of the public agencies.

A special website is being created these days. It will store the information about the list of licensed activities and activities that require permissions. There will be forms of documents required for obtaining licenses and permits. Moreover, there will be constantly updated information about the business entities that have already obtained licenses and permits for performing relevant activities.

To encourage the introduction of modern technologies, starting from August 1, 2012 the fee for digital signature issued by the Registration Center of the State Tax Committee was reduced from 20% to 10% of the minimum wage in the country. From January 1, 2013 businessmen have rights to pay taxes and other obligatory payments, at will, by the remote maintenance of bank accounts, including the system \"Internet Banking\". They will also be able to fill declaration of goods during customs clearance in electronic form, to register the ownership of legal entities for real estate on the principle of \"one window\", to send complaints and inquiries in the commercial courts. At the same time, commercial banks will reduce, by at least 20%, the fee charged for maintenance of accounts of business entities that make payments electronically.

Mobile business environment

In recent years, Uzbekistan has implemented a package of measures aimed to deepen market reforms and to liberalize the economy, on improvement of the business environment, promotion of competition, encouraging the development of small business and entrepreneurship. In result, the share of small business in the country’s GDP rose from 31% to 54%, compared to 2000; employment in this sector increased by more than 2 times, and it now accounts for over 75.1% of all employed people. Currently, the private sector creates 82.5% of GDP, 91% of industrial output, and produce almost all agricultural harvest of the country.

However, experts pointed out that the current state of the business environment and business conditions do not still fully meet the requirements and principles of free market economy, common international norms and standards. The unnecessary regulation of business activity still has not been eliminated. Bulky, expensive, non-transparent administrative procedures, bureaucratic barriers and obstacles have not yet been eliminated in industries and sectors of the economy.

It was strongly needed to further simplify, reduce the cost and the number of regulatory procedures, and to broadly introduce electronic, remote forms of relationships between state regulatory authorities and business entities. Therefore, Uzbekistan adopted the special Program of comprehensive measures to improve legislation and to implement measures aimed at further improvement of the business environment and providing greater freedom of entrepreneurship. In general, this program of comprehensive measures, which will be introduced in 2013-2014, contains 35 different items.

For example, to further reduce the tax burden on the subjects of entrepreneurship and to improve tax administration, the microfirms and small enterprises that pay general taxes from January 1, 2013 will not make further compulsory contributions to the state trust funds, to the Ministry of Finance’s Fund of Reconstruction, Construction and Equipping of Educational And Medical Institutions. The exemption do not pertain to enterprises that produce excise goods and engaged in mining mineral resources, that are being taxed for using natural resources.

Representatives of the \"small economy\" have already been able to experience the range of new privileges and preferences. From August 1, the registration and opening of the business do not require notarized specimen of signatures for opening bank accounts, as well as it is needed anymore the presence of the second signature of accountant in the card of signatures for microfirms. In addition, the acceptance of applications for reservation of corporate name of a business entity, statistical agencies perform within 4 hours.

The program also touches the businessmen engaged in foreign trade. Confirmation of the country of origin of imported goods and providing by private entrepreneurs of the documents that certify the legitimacy of the money taken abroad during the customs clearance of the imported goods were abrogated. Also, the national auto carrier got the right to transport imported goods on the territory of Uzbekistan without possessing customs documentation.

These measures have to play their role in further improving of the business environment and increasing the number of small businesses and entrepreneurs. Regulators make tremendous work to inform entrepreneurs about the changes in legislation, new opportunities, privileges and preferences. A demonstrative workshop which was attended by about 10,000 local and foreign entrepreneurs was held this week in the capital. It lasted five days. In the halls of Uzexpocentre anyone could get answers to his questions from the representatives of the State Tax Committee, the State Statistics Committee, the State Customs Committee, Ministry of Justice, the Central Bank and the Chamber of Commerce. Such meetings, seminars and conferences are held today throughout the country.

They allow entrepreneurs to use on practice the opportunities provided by the state as quickly as possible. (Source: Uzbekistan Today newspaper)